The Supreme Court ruled on Friday that Joe Biden’s “forgiveness plan” for student loans was invalid.
Biden’s plan was announced in August of last year, just months before the midterms, and sought to eliminate $10,000 of student debts for individuals earning less than $125,000 a year (or $255,000 for households), as well as $20,000 for those who received a Pell Grant.
In February, the court heard two cases involving this issue: Biden v. Nebraska, and Department of Education V. Brown. In Biden V. Nebraska, the Court ruled 6 to 3 against Biden’s Plan but unanimously denied standing when it came to the Department of Education v. Brown.
Biden’s Education Department used the HEROES Act of 2003 which gives the U.S. Secretary of Education the power to allow military service members to defer their student loan repayments during national crises. This was previously used to delay student loan payments during the COVID epidemic. The Biden administration tried to use the HEROES Act to forgive debt.
The court ruled that “the text of the HEROES act does not authorize Secretary’s loan cancellation program.” The court ruled that the Secretary’s power to “modify” the Act does not allow for “basic and fundamental changes to the scheme” designed by Congress.
The Secretary can only “modify” existing statutes and regulations, and not completely transform them. Before the COVID-19 pandemic began, the “modifications”, issued under the Act, were minor in nature and had a limited impact. The “modifications”, which are being challenged, create a new and fundamentally different program of loan forgiveness. Congress had only specified a few situations in the Education Act that would qualify a borrower to receive a discharge. The Secretary, however, has expanded this discharge to almost all borrowers in the United States. It is “highly doubtful” that Congress would have authorized such a broad loan cancellation program through a “so subtle device as permission for modify”.
In her dissenting opinion, Justice Elana Kagan bizarrely claimed that “the Court today exceeds the proper, limited role it has in our Nation’s government.”
Experts deemed Biden’s proposal unconstitutional. Nancy Pelosi, the Speaker of the House, agreed that Biden did not have the authority to forgive debts. She said in July that “people think the president of the United States is able to forgive debts”. “He does not. He can delay or postpone but he doesn’t have this power. “That… must be an act by Congress.”
Pelosi changed her mind only after Biden decided that the plan would go forward. It was widely believed that the plan was an attempt to increase the turnout of youth Americans for the midterm election, but the Supreme Court would undoubtedly strike it down.