Supreme Court Strikes Down Biden Administration Student Loan Forgiveness Plan

In a 6-3 vote, the court’s conservative majority ruled the president and his U.S. Department of Education Secretary did not have authority under the law to cancel $430 billion in student loan debt without the approval of Congress.

In August 2022, Biden issued an executive order canceling up to $20,000 in federal loan debt for borrowers who received need-based Pell Grants during their collegiate careers if they make less than $125,000 per year. For students who did not qualify for the Pell program, up to $10,000 in debt would be forgiven for those falling under the same income cap.

The administration argued the federal HEROES Act, passed after the Sept. 11, 2001 terror attacks in New York gives the education department authority to cancel the debt during a national emergency, like the one declared for the COVID-19 pandemic.

The Supreme Court’s majority was not convinced.

“We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up,” wrote Chief Justice John Roberts.

In her dissent, Justice Elena Kagan said Congress authorized the forgiveness plan, the education secretary put it into action and the president would have been accountable “for its success or failure.”

“But this Court today decides that some 40 million Americans will not receive the benefits the plan provides, because (so says the Court that assistance is too ‘significant,’)” Kagan wrote.

Federal student loan payments will resume in October, following a three-year pause initiated by former President Donald Trump and continued by Biden.