SCOTUS strikes down Biden’s student-loan forgiveness plan

On Friday, the Supreme Court overturned the Biden administration’s plan to forgive up to $20,000 in federal student-loan debt for 40+ million eligible US borrowers.

📝 The reasoning: In a 6-3 decision along ideological lines, the Court ruled Biden’s loan forgiveness plan was unlawful because it wasn’t explicitly approved by Congress.

• The majority opinion, authored by Chief Justice John Roberts, stated that Court precedent “requires that Congress speak clearly before a department secretary can unilaterally alter large sections of the American economy."
• The Court rejected arguments from the Biden admin and dissenting justices claiming the plan was lawful under the 2003 HEROES Act, which allows the Executive Branch to “waive or modify” student loans when there’s a “national emergency” so borrowers aren’t worse off due to the emergency.

🤔 So, what now?... The Biden admin has begun implementing a new plan for student-loan forgiveness that invokes the 1965 Higher Education Act. Some legal scholars say this law gives the Executive Branch broad authority to “compromise, waive or release” such debt, though other experts disagree.

It’s currently unclear whether the new plan will be of a similar scope and scale as Biden's first loan forgiveness program, or if it will hold up against future legal challenges.

👀 Looking ahead… The federal student-loan repayment process will begin again on September 1 after a 3.5-year pause due to the pandemic, with first payments due on October 1. However, borrowers will be spared from most of the consequences of missing a payment – including late fees, default status, and a lower credit rating – until October of next year.

⚖️🌐🏳️‍🌈 Zoom out: They say things come in bunches, and last week the Supreme Court was busier than a moth in a mitten. In addition to striking down Affirmative Action, strengthening protections for religious workers, and reaffirming state courts’ authority over federal elections, SCOTUS also ruled 6-3 along ideological lines that a Christian graphic artist in Colorado can refuse to make wedding websites for gay couples under the First Amendment.

📊 Flash poll: Do you agree with the Supreme Court’s decision to overturn Biden’s student-loan forgiveness plan?

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