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Supreme Court strikes down Biden student loan cancellation program

July 2, 2023
in General
Supreme Court strikes down Biden student loan cancellation program
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The Supreme Court struck down President Joe Biden’s attempt to forgive more than $400 billion in student loan debts, in a decision Friday that closes a door on an administration push that would affect millions of borrowers.

In the 6-3 opinion split along ideological lines, the conservative justices in the majority found the forgiveness program overstepped the bounds of federal law and usurped the power of Congress to control government spending.

The opinion overturned one of Biden’s moves to deliver on a key campaign promise and signaled that the conservative-controlled court could further restrict administrative agencies. Biden, in a statement, said he would address the nation Friday afternoon and said, “This fight is not over.”

Last year, the Biden administration announced the forgiveness program alongside an end to the pandemic-era pause in student loan repayment. The Congressional Budget Office has previously estimated that the current fiscal year’s projected $1.5 trillion deficit could drop by nearly $400 billion if the Supreme Court invalidated Biden’s plan.

Prior to Friday’s decision, the Biden administration planned for the payment pause to end 60 days after the court’s decision. The recent deal to raise the federal government’s debt ceiling, which Biden signed into law earlier this month, ends the pause by Sept. 1.

The Biden administration had argued a 2003 law, the HEROES Act, gave Secretary of Education Miguel Cardona broad authority to “waive or modify” the terms of federal student loan programs, which included their repayment.

Chief Justice John G. Roberts Jr., in the majority opinion, wrote that Congress could not possibly have meant to allow Cardona to “rewrite the statute from the ground up” to forgive loans.

“However broad the meaning of ‘waive or modify,’ that language cannot authorize the kind of exhaustive rewriting of the statute that has taken place here,” Roberts wrote.

Roberts wrote that the large amount of the student loan relief makes it fall under the court’s “major questions” doctrine, where courts review whether administrative actions that address issues of economic or political significance are supported by a clear congressional authority. The court first explicitly used that doctrine last term in a case about environmental regulations.

Roberts’ opinion noted the program could have impacted more than 40 million borrowers, far more than Congress could have meant to allow through the statute.

“Congress did not unanimously pass the HEROES Act with such power in mind,” Roberts wrote.

In a sign of the stark differences over the case, Justice Elena Kagan read from her dissent after the opinion was announced. Kagan, joined by the court’s other two Democratic appointees, wrote that the court was grabbing power for itself in Friday’s decision.

“In every respect, the Court today exceeds its proper, limited role in our Nation’s governance,” Kagan wrote.

Kagan wrote the majority had sidestepped the court’s typical approach to arrive at their preferred result and criticized the major questions doctrine.

“The result here is that the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness,” Kagan wrote.

The Biden administration had asked the justices to overturn two court decisions that paused the forgiveness program.

The court instead sided with a group of Republican-led states that argued the forgiveness program violated the Constitution by usurping congressional authority to control federal appropriations, and it violated federal administrative law by issuing the forgiveness without normal rule-making.

The program would have forgiven up to $20,000 for Pell Grant recipients and $10,000 for other borrowers. Qualified borrowers needed to earn less than $125,000 individually or less than $250,000 as a household in 2020 or 2021.

As the court cases advanced, the administration extended the pause on student loan payments that has existed throughout the coronavirus pandemic.

Also on Friday, in a separate case, the court unanimously ruled that a challenge to the program from a pair of borrowers who did not qualify for forgiveness should be dismissed because they could not prove they were harmed by the program.

Earlier this month, Biden vetoed a joint resolution that would have canceled the forgiveness program under the Congressional Review Act.

The measure passed the Republican-controlled House and gained the support of a Democrat and an independent in the closely divided Senate. But the measure did not attract enough support to override Biden’s veto.

Lawmaker reaction

Congressional Democrats condemned the decision and called on the Biden administration to act under a separate law, the Higher Education Act, to either extend the pause or issue another loan forgiveness.

Senate Majority Leader Charles E. Schumer, D-N.Y., tweeted that Friday’s decision is “disappointing and cruel” and accused conservative members of the court of hypocrisy.

“As justices accept lavish, six-figure gifts, they don’t dare to help Americans saddled with student loan debt, instead siding with the powerful, big-monied interests,” Schumer tweeted.

Republican leaders praised the Supreme Court’s decision, with Senate Minority Leader Mitch McConnell, R-Ky., calling the forgiveness “student loan socialism” in a statement Friday.

“The President of the United States cannot hijack twenty-year-old emergency powers to pad the pockets of his high-earning base and make suckers out of working families who choose not to take on student debt,” McConnell said in a statement.

On Twitter, House Speaker Kevin McCarthy, R-Calif., praised the ruling and referenced the debt ceiling law Biden signed earlier this month, which would restart student loan payments on Sept. 1. McCarthy said “the President must follow the law.”

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : RollCall – https://www.rollcall.com/2023/06/30/supreme-court-strikes-down-biden-student-loan-cancellation-program/

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