Supreme Court Rejects Biden's Student Loan Debt Forgiveness Plan

Milton Quintanilla | Contributor for | Updated: Jul 05, 2023
Supreme Court Rejects Biden's Student Loan Debt Forgiveness Plan

Supreme Court Rejects Biden's Student Loan Debt Forgiveness Plan

The U.S. Supreme Court voted against President Joe Biden's student loan debt forgiveness plan, which would have provided financial relief for millions of borrowers.

In a 6-3 decision in the case of Biden v. Nebraska, the high court ruled that at least Missouri, one of the six states that sued the Biden administration, had standing to sue the government over the plan and that the plan itself overstepped the Secretary of Education's official authority.

Chief Justice John Roberts, who authored the majority opinion, concluded that the debt forgiveness plan violated the Higher Education Relief Opportunities for Students Act of 2003, The Christian Post reports.

"The question here is not whether something should be done; it is who has the authority to do it," Roberts wrote. "The Secretary of Education claims the authority, on his own, to release 43 million borrowers from their obligations to repay $430 billion in student loans. The Secretary has never previously claimed powers of this magnitude under the HEROES Act."

"Today, we have concluded that an instrumentality created by Missouri, governed by Missouri, and answerable to Missouri is indeed part of Missouri; that the words 'waive or modify' do not mean 'completely rewrite'; and that our precedent—old and new—requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy."

However, Justice Elena Kagan, who was joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, dissented.

"The plaintiffs in this case are six States that have no personal stake in the Secretary's loan forgiveness plan. They are classic ideological plaintiffs: They think the plan a very bad idea, but they are no worse off because the Secretary differs," wrote Kagan.

"In giving those States a forum—in adjudicating their complaint—the Court forgets its proper role. The Court acts as though it is an arbiter of political and policy disputes, rather than of cases and controversies. And the Court's role confusion persists when it takes up the merits."

Last August, the Biden administration unveiled a student loan forgiveness plan, which would have had the Department of Education pay off at least $20,000 in debt cancellation to Pell Grant recipients and as much as $10,000 in debt cancellation to non-Pell Grant recipients.

Students who made less than $125,000 a year and married couples who made less than $250,000 a year were eligible for the debt forgiveness plan.

However, a lawsuit filed by Nebraska, Arkansas, Iowa, Kansas, Missouri and South Carolina argued that the plan violated the Administrative Procedure Act and the separation of powers.

In a unanimous ruling last November, a three-judge panel of the U.S. Circuit Court of Appeals for the Eighth Circuit ruled against the administration and granted a preliminary injunction against the plan.

The panel warned that the student debt forgiveness plan posed a potential threat to the Missouri Higher Education Loan Authority, an organization that deals with student loans.

"Due to MOHELA's financial obligations to the State treasury, the challenged student loan debt cancellation presents a threatened financial harm to the State of Missouri," read the Eighth Circuit panel decision.

"Missouri has shown a likely injury in fact that is concrete and particularized, and which is actual or imminent, traceable to the challenged action of the Secretary, and redressable by a favorable decision. Missouri, therefore, likely has legal standing to bring its claim. And since at least one party likely has standing, we need not address the standing of the other States."

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Milton Quintanilla is a freelance writer and content creator. He is a contributing writer for Christian Headlines and the host of the For Your Soul Podcast, a podcast devoted to sound doctrine and biblical truth. He holds a Masters of Divinity from Alliance Theological Seminary.

Supreme Court Rejects Biden's Student Loan Debt Forgiveness Plan