The Supreme Court Rejects President Biden’s Student Loan Forgiveness Plan
The Supreme Court delivered a significant blow to President Joe Biden’s ambitious student loan forgiveness plan on Thursday. The court, in a 6-3 majority opinion written by Chief Justice John Roberts, ruled against the legality of the initiative.
The decision comes as the nearly three-year moratorium on student loan payments is set to end soon. Starting on September 1, interest will begin accruing again, and payments will be due in October.
Legal Challenges and Controversy
For months, the Supreme Court has been deliberating the constitutionality of President Biden’s plan. Six Republican-led states filed lawsuits, arguing that the president exceeded his legal authority when implementing the program last August. The plan aimed to cancel up to $20,000 in debt for individuals with federal student loans.
President Biden relied on executive power granted by the Higher Education Relief Opportunities for Students Act of 2003, also known as the HEROES Act. The act was initially enacted in response to the COVID-19 pandemic, but the health emergency ended on May 11. The court had to determine whether the HEROES Act empowered the secretary of education to grant federal student loan forgiveness.
Nebraska and five other states contended that erasing the entire loans of 20 million borrowers would result in a “windfall,” leaving them better off than before the pandemic. The U.S. Court of Appeals for the 8th Circuit agreed with the state’s argument and put the plan on hold in October.
The Supreme Court’s 6-3 majority, consisting of Republican-appointed justices, expressed skepticism about the Biden administration’s authority to forgive hundreds of billions of dollars in debt for over 40 million borrowers. However, they also questioned whether the individual borrowers or the state plaintiffs had the standing to bring the lawsuits.
Impact on Student Loan Borrowers
Student loan payments were initially paused at the beginning of the COVID-19 pandemic and have been extended multiple times under both the Trump and Biden administrations. The impending end of the moratorium raises concerns for borrowers who will soon face the resumption of payments and accruing interest.
This is a developing story, and updates will be provided as more information becomes available.
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