The Supreme Court struck down President Biden’s student loan forgiveness plan, ruling Friday that those kinds of big policy questions must be left to Congress, not to executive action.
The 6-3 ruling could have massive political and financial implications, with millions of borrowers and $400 billion worth of taxpayers’ money involved.
Chief Justice John G. Roberts Jr., writing the key opinion, said the law Mr. Biden cited for claiming the power to forgive loans can’t be stretched as far as the president believes.
“Congress did not unanimously pass the HEROES Act with such power in mind,” he wrote.
Mr. Biden’s plan would have canceled up to $20,000 of a borrower’s student loan debt.
The idea was wildly popular with younger voters, who have complained about growing financial burdens that they say make it tougher to get ahead compared with what their parents and grandparents faced. Some compared the loan bailout to the kind of corporate bailouts the government pursued in the 2008 Wall Street collapse and again during the pandemic.
Total student loan debt is roughly $1.75 trillion. Mr. Biden’s forgiveness plan covers about $400 billion, according to the Congressional Budget Office.
Opponents argued that the benefits will go mostly to people from higher-income families, who least need the forgiveness. Studies vary in their exact assessments, though all of them show wealthy households collecting a significant share of the benefit.
The administration figured more than 40 million borrowers were eligible for the plan, and 26 million had already applied as of early this year.
The forgiveness plan had been on hold while the courts considered the case.
Mr. Biden is already working on a backup plan.
The Education Department has proposed a new regulation that would lower repayments based on income levels, cutting them from 10% of discretionary monthly income to 5%. The CBO estimated the plan would cost $230 billion.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
• Alex Swoyer can be reached at aswoyer@washingtontimes.com.