“The Supreme Court kills Biden’s student loan relief plan,” read headlines around the world after the US Supreme Court ruled 6-3 against the president’s debt relief plan.
In their ruling, court stated that “the program was an unlawful exercise of presidential power because it had not been explicitly approved by Congress.”
Biden, who swept into office hoping to overhaul the student loan system, expressed disappointment at the decision. This was something that he had been hoping to get through the courts for awhile now.
When asked how he felt after the ruling, Biden stated, “I will stop at nothing to find other ways to deliver relief to hard-working middle-class families.”
The court looked back at the 2003 law called the Higher Education Relief Opportunities for Students Act, or HEROES Act when making their decision. The law states that the government can provide relief in emergency situations. But in this situation, they did not think that the new proposal fit the requirements.
According to the White House, Biden stated, “My Administration’s student debt relief plan would have been the lifeline tens of millions of hardworking Americans needed as they try to recover from a once-in-a-century pandemic. Nearly 90 percent of the relief from our plan would have gone to borrowers making less than $75,000 a year, and none of it would have gone to people making more than $125,000. It would have been life-changing for millions of Americans and their families. And it would have been good for economic growth, both in the short- and long-term.”
According to NPR, “The HEROES Act allows the Secretary [of Education] to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act,” the ruling states, “but does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal.”
Biden’s plan would have allowed students to cancel up to $20,000 in debt. According to NBC, this would have cost the US more than $400 billion. There would have been around 43 million people eligible to apply for the loan forgiveness.
Biden used the loan proposal back in 2020 when he was running his campaign. He has previously stated that he would invoke the 1965 Higher Education Act. This proposal could take time, but would give the Education Department more authority on the issue.
According to CNN, the administration will pursue another path to providing some student debt relief. The Department of Education would take on a formal rule-making process that could take months to complete.
The student loan repayment process is set to start back up again this August. It had been placed on hold due to COVID. The first payments will not be due until October, however. Despite that, it is recommended that students to reach out to their student loan services so there isn’t any confusion on how much and when payments should be paid.
Jamie Herzog
Intern