WASHINGTON \u2014 The Supreme Court on Friday rejected President Joe Biden\u2019s plan to forgive millions of student loans, ruling that the nation\u2019s chief executive does not have the legal authority to waive more than $400 billion owed to the government.<\/p>\n
The Biden administration had asserted its right to cancel the loans as part of its emergency response to the COVID-19 pandemic and under a 2003 law called the HEROES Act, passed at the time of the Iraq War.<\/p>\n
In a 6-3 vote in Biden v. Nebraska, the court\u2019s conservatives said only Congress could authorize such a large-scale cancellation of government-provided loans, and it has not done so.<\/p>\n
Writing for the court, Chief Justice John G. Roberts Jr. said, \u201cThe HEROES Act allows the secretary to \u2018waive or modify\u2019\u201d provisions of the student aid laws, \u201cbut does not allow the secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal.\u201d<\/p>\n
The court\u2019s conservatives are highly skeptical of government agencies that claim the power to make major changes in the law or spend large sums of money without the approval of Congress.<\/p>\n
Roberts called the cost and scope of Biden\u2019s plan \u201cstaggering by any measure.\u201d He cited a University of Pennsylvania study that estimated the \u201cprogram will cost taxpayers between $469 billion and $519 billion depending on the total number of borrowers\u201d who were covered.<\/p>\n
In dissent, Justice Elena Kagan wrote: \u201cIn every respect, the court today exceeds its proper, limited role in our nation\u2019s governance … The result here is that the court substitutes itself for Congress and the executive branch in making national policy about student-loan forgiveness.\u201d<\/p>\n
She argued that Congress had indeed authorized \u201cwaiving\u201d student loans in the face of national emergency, and it was the conservative court that was rewriting the law.<\/p>\n
In response, Roberts fired back: \u201cThe dissent is correct that this is a case about one branch of government arrogating to itself power belonging to another. But it is the Executive seizing the power of the Legislature.\u201d<\/p>\n
Biden said Friday that he strongly disagreed with the court\u2019s decision. He vowed to keep fighting, announcing that he would reintroduce large-scale student debt relief by invoking a different law.<\/p>\n
Advocates of forgiving student loans argue that the Higher Education Act of 1965 gives the U.S. secretary of education broad authority to \u201ccompromise, waive or release\u201d students\u2019 federal debts.<\/p>\n
Speaking to reporters Friday, Biden declined to offer further details about who would qualify or how much relief borrowers would receive under his new plan, but said he believed it was \u201cthe best path that remains to provide for as many borrowers as possible.\u201d<\/p>\n
\u201cToday\u2019s decision has closed one path,\u201d he said. \u201cNow we\u2019re going to pursue another.\u201d<\/p>\n
The president also announced plans for a 12-month \u201con ramp\u201d repayment program for borrowers who may not be able to afford payments when they resume this fall. The program would temporarily remove the threat of default or of harming a borrower\u2019s credit, he said.<\/p>\n
The heavy burden of student loans had become a major issue for Democrats.<\/p>\n
As a candidate in 2020, Biden promised to forgive up to $10,000 in student loans for many young borrowers, but he did not seek legislation from Congress when it was under Democratic control.<\/p>\n
Last year, with the end of pandemic in sight, he joined Education Secretary Miguel Cardona to announce that the government \u2014 as part of its COVID-19 response \u2014 would forgive $10,000 of most outstanding student loans and up to $20,000 for those who came from low-income families<\/p>\n
About 26 million borrowers applied for relief.<\/p>\n
But the policy\u2019s legal status remained in doubt. The 2003 HEROES Act said the Education Department could \u201cwaive or modify\u201d any provision of the government-funded student loans for any borrower affected by \u201ca war or other military operation or national emergency.\u201d<\/p>\n
Lawmakers said their aim was to extend temporary relief to those who were called up to serve in Iraq and to make sure they were not \u201cin a worse position financially\u201d because of their service.<\/p>\n
In March 2020, President Donald Trump declared a national emergency in response to COVID-19, and his administration suspended the required repayments and the accrued interest on outstanding student loans. These suspensions have remained in effect and have cost the government more than $100 billion.<\/p>\n
Deciding to go further, Biden said the cost of higher education had skyrocketed and left many students with crushing debts. The White House said his plan to forgive some or all of millions of loans would \u201cprovide more breathing room to America\u2019s working families as they continue to recover from the strains associated with the COVID-19 pandemic.\u201d<\/p>\n
But attorneys for Nebraska and five other Republican-led states sued and argued the president was \u201cunlawfully invoking the COVID-19 pandemic to assert power beyond anything Congress could have conceived.\u201d<\/p>\n
In defense of the plan, the administration\u2019s lawyers said Congress had indeed authorized the Education Department to \u201cwaive or modify\u201d any provision of the student aid programs. They also argued the states had no standing to sue because they were not harmed by the president\u2019s decision to forgive loans.<\/p>\n
But a federal appeals court in St. Louis sided with the Republican-led states and blocked the loan cancellation program from taking effect. In December, the Supreme Court refused to lift that order and agreed to hear the administration\u2019s appeal in late February.<\/p>\n
Led by Roberts, the court\u2019s conservatives said they were highly skeptical of the notion that the 2003 law or the pandemic gave the administration authority to wipe away millions of loans.<\/p>\n
On Friday, they said the state of Missouri had standing to sue because its higher education financing agency would lose an estimated $44 million in fees if the loan forgiveness took effect.<\/p>\n
\u201cThis financial harm is an injury in fact\u201d and gives Missouri standing to sue, Roberts said.<\/p>\n
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(Los Angeles Times staff writer Courtney Subramanian in Washington contributed to this report.)<\/p>\n
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