The Supreme Court ruled Friday that President Joe Biden does not have the authority to forgive $430 billion in student loan debt.
In a 6 to 3 majority vote for Biden v. Nebraska, the court ruled that at least Missouri has proper legal footing to challenge Biden’s plan, and Biden does not have the authority to allow the Education secretary to cancel such a large amount of debt without Congress’ authorization.
Biden said his administration is looking for another way to provide student loan debt relief to Americans.
In the majority opinion, Chief Justice John Roberts wrote that Biden’s plan to forgive up to $20,000 in student loan debt for borrowers who received federal Pell grants would harm Missouri by reducing profits at the Missouri Higher Education Loan Authority (MOHELA).
“Under the Secretary’s plan, roughly half of all federal borrowers would have their loans completely discharged,” Roberts wrote. “MOHELA could no longer service those closed accounts, costing it, by Missouri’s estimate, $44 million a year in fees…The plan’s harm to MOHELA is also a harm to Missouri.”
Legal experts and advocates for debt forgiveness questioned the argument brought by the six GOP-led states, Nebraska, Missouri, South Carolina, Kansas, Arkansas and Iowa.
“I was surprised the court found Missouri had standing,” higher education expert Mark Kantrowitz told CNBC. “The debts of MOHELA are not the debts of the state. And MOHELA is able to sue on its own, so why didn’t it bring its own lawsuit?”
Biden announced his plan in August 2022 to forgive up to $20,000 in student loan debt for 45 million Americans, which was estimated to cost $400 billion. But, Americans were struggling in 2019, according to figures, to repay student loans, and especially after the COVID-19 pandemic.
Melissa Byrne is a student loan activist and Executive Director of We, The 45 Million, a group pushing for free college for all Americans. She said that income driven repayment does not lead to cancellation of debt.
“Student loan relief is a promise from President Biden to more than 40 million families. It is our chance for dignity. He must immediately implement a plan B including finding a different path to ensure no repayment begins until cancellation is delivered,” Byrne said.
She added that Biden must find a way to cancel student debt before repayment begins.
“Failure to deliver student loan relief is not an option,” Byrne said.
Regarding Biden v. Nebraska and Department of Education v. Brown, Congresswoman Jennifer McClellan of Virginia called the decision “devastating to the 43 million borrowers who counted on President Biden’s one-time relief offered in response to the extraordinary pandemic economic pressures. This decision will inevitably hamper the economic mobility of millions of college students and graduates that are overburdened by crushing student loan debt.”
The cost of a four-year public or private college education has nearly tripled since 1980, according to McClellan, which disproportionately impacts low- and middle-income Americans, first-generation college students and Black communities.
“Over 20 years ago, Congress enacted the HEROES Act to authorize the Secretary of Education to provide relief to student-loan borrowers when a national emergency struck. The language of the bill was plain and the legality of the Secretary’s ability to provide such relief was clear. Today’s decision by the Court is a blatant overreach of their judicial authority,” McClellan said.
She said that families in Virginia and across the United States who work hard would have benefitted from the relief. Congress must do more to address student loan debt in America.
In the wake of reversing 60 years of precedence on affirmative action, the Court ripped away relief from millions of borrowers. According to the Student Borrower Protection Center (SBPC), both decisions threaten to exacerbate racial and economic disparities in the country.
“Today, a majority of this corrupt court brushed aside the rule of law to advance its ideological crusade against working people. The high court is asking people with student debt to pay the price for decades of government mismanagement and industry abuses across the student loan system — making it clear that, once again, the wealthy and powerful play by a different set of rules from the rest of us,” SBPC Executive Director Mike Pierce said Friday. “Corruption is Chief Justice John Roberts’ legacy. This court will go down in history as one dedicated to expanding the rights of powerful special interests while stripping rights away from everyone else. The time for court reform is now. It now also falls to President Biden to stand with student loan borrowers and use the full might of the federal government to answer their demand for justice and relief in the face of this lawless and shamefully political ruling. Borrowers cannot afford to wait any longer.”
SBPC Deputy Executive Director Persis Yu the decision is “an absolute betrayal to 40 million student loan borrowers and their families counting on the court to uphold the law and move them closer to economic freedom. Caving to craven and naked political interests, this court relied on convoluted reasoning and distorted facts to allow these two politically contrived cases to deny desperately needed relief to tens of millions of low-income and working-class student loan borrowers. The government’s own data shows restarting repayment on September 1 without cancellation will result in millions of borrowers experiencing unprecedented levels of financial distress. President Biden must use all the tools at his disposal to protect borrowers and deliver on his promise to 40 million student loan borrowers.”
In a new poll, SBPC found that 54 percent of voters support action to cancel student debt despite the Supreme Court decision, and 38 percent oppose. Among younger voters, such action wins majority support across party lines — 70 percent of voters under age 45 support action, including 84 percent of younger Democrats, 66 percent of younger independents and 50 percent of younger Republicans.
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Rebecca Barnabi
