SCOTUS blocks President Biden’s student loan forgiveness plan
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The Supreme Court of the United States blocked President Joe Biden’s plan to cancel $430 billion of student loan debt on Friday, ruling that federal law does not authorize the U.S. Department of Education to forgive student debt.
The court’s 6-3 majority decision held that the administration needed Congress’ approval in order to cancel a large amount of consumer debt, rejecting arguments that the Higher Education Relief Opportunities for Students 2003 law gave Biden the ability to authorize the plan.
“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan,” Chief Justice John Roberts wrote in the majority opinion for Biden v. Nebraska. “We agree.”
Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett voted alongside Roberts. Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson opposed the decision.
The ruling could have significant complications for Syracuse University students and alumni as 53% of graduating students have taken out some kind of loan, according to U.S. News & World Report’s profile of the university. After completing an undergraduate degree, the median federal loan debt among borrowers is $26,952.
In May, the university announced a roughly 5% tuition increase for the 2023-24 academic year, rising to $61,310 a year for full-time undergraduate students. Students have voiced concerns in recent years about the university’s tuition rates, which have increased by a total of over $13,000 between the 2017-2018 and 2022-2023 academic years.
The three-part plan, which Biden announced in August, intended to benefit up to 43 million American borrowers. It included canceling remaining debt balances for roughly 20 million borrowers, with targeted relief to low- and middle-income borrowers.
SU’s Student Association announced its disapproval of the Court’s decision, writing that SA will remain committed to advocating for scholarship and grants to improve accessibility to higher education.
In March 2022, SA passed a resolution calling for Biden to cancel student debt. SA continues to “stand firm” by that resolution.
“There is still some hope, as some potential legal routes remain for the government, and we will support actions and advocacy that works towards this,” SA President Will Treloar, Executive Vice President Yasmin Nayrouz and Vice President of University Affairs Liv Curreri wrote in the release.
Biden announced a series of new actions in response to the Court’s decision, some of which will function under the 1965 Higher Education Act. Part of the plan will ensure student loan borrowers pay a lower percentage of their income – a decrease from 10% of their disposable income to 5% – under federal income-driven repayment plans.
“It’s now the most generous repayment program ever. No one with an undergraduate loan today or in the future … will have to pay more than 5% of disposable income to repay their loan,” Biden said.
He also said his administration would create a temporary 12 month onramp repayment program. Under the program, borrowers who miss payments the year following the end of the student loan payment pause will not be subject to penalties or be reported to credit agencies, Biden said.
SU has not released a public statement on the Court’s decision as of 4:30 p.m. Friday.
The Court began hearing oral arguments for the two cases – Biden v. Nebraska and Department of Education v. Brown – in February. The Court wrote that Secretary of Education Miguel Cardona, under the HEROES law, could modify provisions related to financial assistance programs, but not unilaterally erase the debt itself.
“‘Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?’” Roberts wrote. “We can’t believe the answer would be yes.”
Cardona and the Department of Education also finalized Saving on A Valuable Education, a new income driven repayment plan. The plan intends to cut monthly payments to zero dollars for low-income borrowers, save other borrowers at least $1,000 per year and stop runaway interest, according to the press release.
“Our Administration will continue the critical work we have pursued under President Biden’s leadership to make college more affordable to more Americans and make long-overdue improvements to the student loan system,” Cardona wrote.
