Biden vows to fight after top US court blocks student debt relief

Washington, DC – US President Joe Biden has promised to continue pursuing student debt relief in the United States, after the country’s top court blocked his plan to cancel billions of dollars in college loans.

In a ruling on Friday morning, the US Supreme Court said the Biden administration does not have the authority to cancel the debt of millions of Americans. The 6-3 decision was split along the court’s ideological lines with the conservative majority prevailing.

It deals an enormous blow to millions of borrowers and to a major policy and campaign promise by the Democratic president before the 2024 elections. Student loan relief has been a top demand of progressives, who argue that college debt is stifling young people’s social mobility and widening the racial wealth gap.

Critics have said it is unfair to those who had already paid for their own educations or who chose not to attend college. They also argue that loan forgiveness does not address the root causes of student debt – the soaring cost of higher education in the US.

“I know there are millions of Americans … who feel disappointed and discouraged and even a little bit angry about the court’s decision today on student debt. And I must admit I do, too,” Biden said in a speech at the White House later on Friday.

“My plan would not only have been life-changing for millions of Americans, it would have been good for the American economy, freeing millions of Americans from the crushing burden of student debt.”

Biden’s plan

The US president in August announced his student loan forgiveness plan, which would cancel $10,000 to $20,000 in debt that students and graduates mostly owe to the federal government.

But before the debt forgiveness applications became available, lower courts suspended the programme after lawsuits by Republican states.

The top court baulked at the price tag of the debt relief, estimated to be $430bn, saying the executive branch cannot move forward with the plan without explicit authorisation from Congress.

“Our precedent – old and new – requires that Congress speak clearly before a Department [of Education] secretary can unilaterally alter large sections of the American economy,” Chief Justice John Roberts wrote for the majority.

Biden had relied on the HEROES Act, a 2003 law that allowed the Department of Education to provide student debt relief in cases of a “national emergency”.

Former President Donald Trump froze student loan payments at the outset of the pandemic in 2020. But that pause is due to expire this year, resuming what many students and graduates describe as a huge financial burden.

The Supreme Court ultimately decided that student loan forgiveness exceeds the powers granted by the HEROES Act.

With Republicans in control of the House of Representatives, Congress is unlikely to pass college debt relief legislation.

First, I'm announcing a new path to provide student debt relief to as many borrowers as possible, as quickly as possible, grounded in the Higher Education Act.

Just moments ago, @SecCardona took the first official step to initiate this new approach.

We aren’t wasting any time.

— President Biden (@POTUS) June 30, 2023

A Senate legislative procedure known as the filibuster, which requires 60 out of 100 senators to agree to end debate and proceed to votes on bills, also makes it difficult to approve student loan forgiveness in the near future, even if Democrats gain control of both chambers of Congress.

In his speech on Friday, Biden announced the launch of a “new path” to student debt relief through the Higher Education Act – a law that gives Washington broad authority over matters of education – in response to the Supreme Court’s decision.

He also said that when the freeze on student debt repayments lifts later this year, his administration would offer leniency for 12 months to anyone who misses payments.

“This is not the same as the student loan pause, but during this period – if you miss payments – this ‘on ramp’ will temporarily remove the threat of default or having your credit harmed,” Biden tweeted. “This fight isn’t over.”

US legislators react

Democratic Congresswoman Pramila Jayapal, chairwoman of the Congressional Progressive Caucus, was quick to denounce the high court’s ruling, calling the conservative-dominated judicial body “extreme”.

She added that student debt is preventing people from fully participating in the US economy.

“So many of the people affected are Black, brown, Indigenous and poor folks. This is a terrible decision,” Jayapal said in a video released on social media.

But Republican Senator Tom Cotton, who represents Arkansas, welcomed the ruling.

“Biden’s student loan transfer scheme required millions of Arkansans to pay off the loans of rich doctors and lawyers. The Supreme Court was right to strike this scam down,” he wrote on Twitter.

House Speaker Kevin McCarthy also backed Friday’s ruling. “The 87% of Americans without student loans are no longer forced to pay for the 13% who do,” he said in a social media post.

McCarthy noted that the court’s opinion cited his Democratic predecessor, Nancy Pelosi, as saying that the president does not have the power to forgive student debt. “I agree with her for once!” the House speaker wrote.

In a dissenting opinion, liberal Justice Elena Kagan accused the Supreme Court’s majority of overstepping its “limited role” in interfering with the nation’s governance.

She argued that forgiving student debt is within the authority of the executive branch, and that the plaintiffs – six Republican states – had no standing legal ground to challenge the policy.

“A court may address the legality of a government action only if the person challenging it has standing – which requires that the person have suffered a ‘concrete and particularized injury’,” Kagan wrote.

Friday’s decision is the latest ruling by the top court to advance right-wing political causes. On Thursday, justices ruled that colleges cannot consider race when assessing college applications.