(WXMI) — The U.S. Supreme Court struck down a plan that would have wiped away or reduced student loans for millions of Americans.
The U.S. Supreme Court ruled that President Joe Biden exceeded his executive authority with his plan to cancel or reduce student loans for millions of Americans.
Justices voted 6–3, with Justices Kagan, Sotomayor and Jackson dissenting.
Watch President Biden deliver remarks on the ruling:
"Hypocrisy is stunning," Biden said. "You can't help a family making $75,000 a year, but you can help a millionaire and you have your debt forgiven?"
In August, Biden proposed erasing $10,000 in federal student loan debt for people making less than $125,00 a year, or households that earn less than $250,000. Anyone who received federal Pell Grants to attend college would have an additional $10,000 canceled.
The Biden administration cited the national emergency created by the COVID-19 pandemic as authority for the student loan debt relief program under the HEROES Act.
Republican-led states and two individuals filed lawsuits saying Biden lacked the authority to broadly cancel student loans.
The justices had to decide whether each challenger had the legal standing to sue.
In one of the cases, the justices decided the individuals who sued did not have the legal right to sue, but the case brought by the states did have standing.
In the case of the Department of Education v. Brown, where the challengers were two individuals, the justices unanimously ruled the challengers did not have the legal authority to sue.
The challengers were two student loan borrowers who claimed the program wasn’t fair because of eligibility requirements and the fact that the plan only addressed government-backed loans and not private loans.
“Respondents Myra Brown and Alexander Taylor are two borrowers who do not qualify for the maximum relief available under the Plan. Their one-count complaint alleges that the Secretary was required to follow notice-and-comment and negotiated-rulemaking procedures in promulgating the Plan, which all agree he did not do,” Justice Alito wrote. He went on to state, “Respondents cannot meaningfully connect the absence of loan relief under the HEA to the adoption of the Plan, so they have failed to show that their injury is fairly traceable to the Plan.”
While the justices found no standing in that case, they did in the case of Biden vs. Nebraska.
In his opinion, Chief Justice John Roberts said the Biden administration could not rely on the HEROES Act for the loan forgiveness plan.
"The authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing regulations," Roberts wrote, "not transform them."
In her dissent, Kagan wrote, “In every respect, the Court today exceeds its proper, limited role in our Nation’s governance.” Kagan stated, “The Court’s first overreach in this case is deciding it at all.”
She goes on to argue, “The tell comes in the last part of the majority’s opinion. When a court is confident in its interpretation of a statute’s text, it spells out its reading and hits the send button. Not this Court, not today. This Court needs a whole other chapter to explain why it is striking down the Secretary’s plan. And that chapter is not about the statute Congress passed and the President signed, in their representation of many millions of citizens. It instead expresses the Court’s own ‘concerns over the exercise of administrative power.’”
When the case was argued in front of the Supreme Court earlier this year, the Biden administration said that 26 million people have applied to have a portion of their federal student loans forgiven under the plan.
The administration argued that the HEROES Act allows the secretary of education to waive or modify the terms of federal student loans in connection with a national emergency.
Federal student loan payments have been on pause for three years due to the pandemic.
After Friday’s ruling by the Supreme Court, more than 40 million Americans will need to prepare to start making payments again.
Student loan interest will start accruing on Sept. 1, with payments restarting in October.
According to the Federal Reserve, in 2021, 38% of student loan borrowers were 40 years and older, including more than 3.5 million over the age of 60. The Federal Reserve reported 28% were between the ages of 20 and 29, and 34% of borrowers were under the age of 30.
According to the Education Data Initiative, the average student loan debt has tripled since 2007. The organization reports the 5-year annual average student loan debt growth rate is 15%, and the average student loan debt growth rate outpaces rising tuition costs by 166.9%.
A Federal Reserve analysis in 2021 shows the average balance of borrowers in Michigan in 2021 was about $36,000.
Local lawmakers and leaders in the community reacted to Friday’s ruling with a mixture of praise and outrage.
Congressman John Moolenaar said, “This ruling is a win for the Constitution and the rule of law. The Constitution is very clear that no federal funding can be used unless Congress passes a law allowing it to happen. The Supreme Court has rightfully stopped President Biden from spending billions of dollars with no legal authority to do so. College administrators must do more to bring down the cost of college and provide value to the students who enroll in their schools,”
Senator Debbie Stabenow called the decision “deeply concerning” stating: “Yesterday it was racial diversity in higher education, today it’s attacking the LGBTQ+ community and people crippled with student loan debt. It’s deeply concerning that a group of MAGA Republicans has taken over the highest court of the land and are systematically rolling back our freedoms and opportunities for everyone to have a fair shot to succeed in this country. This fight is not over. It’s now more important than ever for Congress and the Administration to take all actions possible to grow the middle class.”
Attorney General Dana Nessel expressed her disappointment in the ruling, saying: “Tens of millions of Americans have been saddled with significant student debt, limiting their opportunities. This plan would have benefited 843,000 Michigan middle and lower-income residents, worth at least $8 billion to the State’s residents. Today's disappointing court ruling reverses the will of the majority of Americans who elected the Executive and Legislative branch to serve with this authority and robs them of much needed relief.”
Read the full opinion by the Supreme Court below.
BIDEN, PRESIDENT OF THE UNITED STATES, ET AL. v. NEBRASKA ET AL. by WXMI on Scribd
Despite Friday's ruling, the president said he plans to continue seeking avenues that would bring financial relief to the nation's borrowers.
"I believe the court's decision to strike down my student debt relief program was a mistake. It was wrong," Biden said. "I'm not going to stop fighting to deliver borrowers what they need, particularly those at the bottom end of the economic scale. So we need to find a new way."
Dubbed the Higher Education Act, the president says his new plan would permit Education Secretary Dr. Miguel Cardona "to compromise, waive or release loans under certain circumstances."
Biden notes, however, that plan might take some time before it comes to fruition.
Meanwhile, as student loan payments are set to resume in the months ahead, the president says certain protections will be offered for those who are unable to pay back their debts.
"We're creating a temporary 12-month what we're calling 'on-ramp repayment program,'" Biden explains. "During this period, if you can pay your monthly bills, you should. But if you cannot, if you miss payments, this on-ramp temporarily removes the threat of default."
