The Supreme Court on Friday struck down the Biden Administration’s student loan forgiveness program, halting up to $20,000 of debt relief for an estimated 40 million Americans and, perhaps, escalating the issue for the 2024 presidential election.
Only Congress, not the president, has the authority to enact such a sweeping cancellation of student debt, Chief Justice John Roberts wrote in the opinion for the court’s conservative majority in a 6-3 decision.
For many students, the news is a crushing blow, eliminating federal student loan debt relief for roughly 40% of student loan borrowers. To qualify for relief, borrowers had to earn less than $125,000 a year for individuals and $250,000 for married couples.
Now, people with student loans will be on the hook to resume repaying this fall. It will be the first time debt payments will come due since March 2020, the start of the COVID-19 pandemic. Student loan interest will begin accumulating again in September, while payments will be due the following month.
President Joe Biden called the decision “disappointing” but said “the fight is not over,” and his administration initiated a new rulemaking process aimed at opening an alternative path to debt relief.
“Debt is a really hard thing to overcome,” said Julien Elliot, a 21-year-old at San Jose State University. “I’ve even seen my mom struggle with it: She just finished paying off her student loan debt, and she’s 55 years old.”
Friday’s ruling once again exposed the rapid ideological shift in America’s highest court.
The student debt case came after two suits were brought to the Supreme Court, one from a group of Republican states that challenged the administration’s authority to cancel student debt, and the other from two students who felt they wouldn’t get enough out of the existing program.
Since the Biden administration announced the plan last August, the government has approved 16 million applications for relief — but the plan wasn’t welcomed by everyone.
“You should be owning the decisions you make when you go to college, and when you sign that dotted line that says, I’m taking out a loan for x dollars,” said Utkarsh Jain, spokesperson for the Berkeley College Republicans.
The case involved a question of whether the administration had authority to order widespread loan forgiveness under the Higher Education Relief Opportunities for Students Act of 2003.
That law — passed during counter-terrorism wars following the Sept. 11, 2001, attack — says the Education Secretary “may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … as the Secretary deems necessary in connection with a war or other military operation or national emergency.” The Biden administration argued the COVID-19 pandemic was just such an emergency.
But Roberts, joined by justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett, wrote that the debt cancellation was ordered as the pandemic “came to its end.” And the law, he wrote, “does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal.”
“The question here is not whether something should be done; it is who has the authority to do it,” Roberts wrote.
Writing in dissent, Justice Elena Kagan, joined by justices Sonia Sotomayor and Ketanji Brown Jackson, insisted that the law allowed the Education Secretary to “give the relief that was needed, in the form he deemed most appropriate, to counteract the effects of a national emergency on borrowers’ capacity to repay.”
“That may have been a good idea, or it may have been a bad idea,” Kagan wrote. “Either way, it was what Congress said.”
Thad Kousser, a UC-San Diego political science professor, said the issue, though controversial, could motivate Democratic voters in the 2024 presidential election, giving student debtors “a monthly reminder that student loan forgiveness would make them much better off.”
“It gives Joe Biden an opportunity to say, ‘I fought for you on this and if you re-elect me and flip Congress we can change this,’ ” Kousser said.
Over the past few decades, student debt has exploded in both the Bay Area and across the country. From 2003 to 2018, an analysis from the Federal Reserve Bank of San Francisco found, student debt in the region increased by 243%. During the same time period, the percentage of the adult population with student debt doubled, with the median balances increasing from $13,685 to $17,489.
Still, critics warned the plan wouldn’t address the high cost of college and could lead to an uptick in tuition costs down the line.
Critics also pointed to the cost of the plan itself. Biden’s debt relief program would have cost between $469 and $519 billion over 10 years, according to an analysis by the University of Pennsylvania’s Wharton School of Business. And there’s the issue of fairness. The Texas Public Policy Foundation, a right-leaning think tank, highlighted how graduates who’ve already paid their student debt as well as people who didn’t attend college wouldn’t benefit from the policy.
“Someone making $125,000 a year doesn’t need help paying their student loans,” said Andrew Gillen, a senior policy analyst at the foundation.
But advocates say the debt relief program would open doors for graduates across the country. It would also help those who — even with advanced degrees — are working in jobs where it can be difficult to pay off debt, such as social work or teaching. An analysis from the Education Department found that nearly 90% of the benefits would go toward people earning less than $75,000 per year.
“Without (debt forgiveness), it’s like, man, what will people do?” said 25-year-old David Razo, another San Jose State student.
Nearly half of Americans supported the Biden Administration’s plan, according to a May poll from USA Today and market research company Ipsos. That rate surged among those who have student loans, with 83% of those Americans supporting Biden’s plan.
Kousser said that though controversial, the loan cancellation plan is more motivating to those whose debt would have been wiped out than to those whose taxes will pick up the cost.
“The voters who disagree with you,” he said, “aren’t voters for whom this is a make or break issue.”
