Millions of federal student loan borrowers will not receive up to $20,000 in debt relief as the Biden Administration had intended, as the Supreme Court Friday ruled against the White House in one case challenging the policy, ending months of uncertainty over the program’s fate and delivering a win to Republicans who argued the administration was overstepping its authority.
Activists and students protest in front of the Supreme Court during a rally for student debt ... [+]
The Supreme Court heard arguments in two cases challenging the Biden loan forgiveness program, one brought by six GOP-led states and another brought by two individual borrowers, backed by the conservative Job Creators Network, who didn’t qualify for the full amount of student loan forgiveness.
The lawsuits argued the Biden Administration overstepped its authority through the loan forgiveness program, which would forgive $10,000 in federal student debt for borrowers earning less than $125,000, or $20,000 in forgiveness for Pell Grant recipients.
The Biden Administration argued it does have authority to implement the loan forgiveness, and claims the challengers don’t have standing to bring the lawsuits in the first place and they should be thrown out.
The court ruled unanimously in favor of the Biden Administration in the borrowers’ case, but sided with the GOP states, meaning the policy has been struck down.
This story is breaking and will be updated.
26 million. That’s how many people applied for student debt forgiveness before the program was suspended in November, according to the Education Department, which is more than half of the 43 million borrowers eligible. Of those applications, 16 million borrowers have been approved so far to have their debt forgiven, but no funds were disbursed before the program was halted.
The Biden Administration announced its student loan forgiveness program in August following heavy pressure from Democrats, immediately sparking Republicans’ ire and prompting a wave of litigation. The two successful cases that ended up before the Supreme Court both resulted in lower court judges blocking funds from being disbursed, and the Biden Administration paused the program in November in response. Since the Supreme Court took up the case, Congress passed legislation that would repeal the student debt relief program, but President Joe Biden vetoed the bill and House lawmakers were unable to secure the votes needed in order to override it.
The White House justified student loan relief through the Covid-19 pandemic, arguing that it was a national emergency that gave the administration the authority to cancel debt under the HEROES Act. Though the White House formally ended the national emergency for the Covid pandemic in May, the administration has argued student debt relief is still justified because of the pandemic and it’s separate from the end of the national emergency. “There was a national emergency that impacted millions of student borrowers,” an administration official told Insider. “Many of those borrowers still face risk of default on their student loans due to that emergency.”
In addition to the more sweeping debt relief plan, the Biden Administration has also imposed a number of other measures regarding student loans that are separate from the Supreme Court cases and aren’t impacted by its decision. The administration has announced changes to debt repayment plans that are based on a percentage of borrowers’ discretionary income, which are designed to reduce borrowers’ monthly payments, and has also expanded debt relief for public servants.
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