(PartiallyPolitics.com) – On Friday, the Supreme Court determined that the Biden administration’s student loan debt relief initiative cannot proceed as planned.
With a ruling of 6 to 3, the court confirmed that federal regulations do not permit the Secretary of Education to wipe out over $430 billion in student loan debt.
“The Secretary’s plan intended to remove roughly $430 billion from federal student loan accounts, eliminating the loans of 20 million borrowers entirely and reducing the median debt for the remaining 23 million from $29,400 to $13,600,” detailed Chief Justice John Roberts in the majority opinion. “Six states brought a lawsuit, contending that the HEROES Act does not sanction the debt forgiveness strategy. We concur.”
President Biden has expressed significant disagreement with the court’s verdict and plans to announce further measures to safeguard student loan borrowers later today, according to a White House insider speaking to Fox News Digital.
The same source also revealed that Biden plans to accuse Republicans of denying the relief he pledged to student borrowers.
The paused initiative by Biden aimed to provide up to $10,000 in debt relief, and up to $20,000 for Pell Grant beneficiaries, to individuals earning less than $125,000 annually. The anticipated cost of this program to the government was over $400,000.
In August 2022, Biden instigated this novel debt forgiveness approach, and his administration processed around 16 million applications before Republican opposition led to a hold on the program.
Republicans contended that Biden lacked the unilateral power to forgive student loans. Projections from the Congressional Budget Office suggested that Biden’s proposal would cost taxpayers nearly $400 billion. Republicans reacted fiercely to this figure, arguing that forgiving the debt would be unfair to those who had self-funded their education, repaid their loans, or never attended college.
The court considered two distinct challenges to the law. In the case of Department of Education v. Brown, the court ruled that two private borrowers who wished to dispute the loan forgiveness plan did not have the standing to sue.
The second case, Biden v. Nebraska, was more relevant. Here, six states raised a lawsuit against the loan forgiveness scheme. The court confirmed that at least Missouri had the standing to sue, given that the program could expose a nonprofit government corporation established by the state to a projected $44 million in yearly fees.
Anticipating an unfavorable ruling, Biden’s Education Department had already begun investigating alternate methods to provide relief.
In June, Republicans presented their own proposal to tackle student loans and the escalating cost of college education, comprising a series of five bills. The Senate Republicans’ plan endorses programs designed to ensure students comprehend the actual cost of college and also discontinues loans for programs that do not lead to sufficiently high salaries to justify the loans.
“This will curb some of the most egregious instances of students being taken advantage of for profit. It will pressure educational institutions to lower costs and compete for students. A remarkable concept,” stated Sen. Tommy Tuberville, R-Ala., regarding the bill. “It will also prevent students from accumulating a debt they can never repay.”
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