WASHINGTON — In a highly contentious ruling, the Supreme Court has declared that the Biden administration exceeded its jurisdiction in its efforts to cancel or reduce student loans for millions of Americans.
The decision, with a 6-3 split among the justices, effectively terminates President Joe Biden’s $400 billion plan, leaving borrowers responsible for repaying their loans, which are set to resume by the end of summer.
The court determined that such an expensive program requires the endorsement of Congress before it can be implemented. The majority rejected the argument that the HEROES Act, a bipartisan 2003 law addressing student loans, granted President Biden the authority he claimed.
Chief Justice John Roberts, writing for the court, stated, “Six States challenged the loan forgiveness plan, arguing that the HEROES Act does not authorize it. We concur with this argument.”
Justice Elena Kagan dissented, along with the two other liberal justices, expressing that the majority decision “negates the joint decision of the Legislative and Executive Branches, resulting in the elimination of loan forgiveness for 43 million Americans.”
Loan repayments are expected to resume by late August, as initially scheduled by the administration and included in the agreement to raise the debt ceiling. Payments have been on hold since the start of the coronavirus pandemic over three years ago.
Under the forgiveness program, individuals earning less than $125,000 or households with incomes under $250,000 would have had $10,000 of their student loan debt canceled. Pell Grant recipients, who typically demonstrate greater financial need, would have received an additional $10,000 in debt forgiveness.
The administration reported that 26 million people had applied for relief, and 43 million would have been eligible. The estimated cost of the program over 30 years was $400 billion.
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