US: Supreme Court halts Biden's student loan forgiveness plan
The United States (US) Supreme Court rejected President Joe Biden's student loan forgiveness scheme on Friday, depriving tens of millions of Americans of the opportunity to have up to $20,000 of their debt canceled. The plan, unveiled by Biden last year, would have forgiven up to $10,000 (£7,800) per borrower, and up to $20,000 in some situations.
Why does this story matter?
The verdict, which matched expert forecasts given the judges' conservative majority, is a severe blow to debtors who were promised loan forgiveness by the Biden administration last August. The White House estimated that nearly 90% of student loan borrowers would have qualified for relief under its plan, and approximately 26 million people have already submitted loan forgiveness applications.
Ruling was 6-3
Reportedly, the ruling was 6-3, with the three liberal justices dissenting. The debt relief plan was challenged by Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina, as well as two individual borrowers who objected to its requirements. Meanwhile, a source close to the White House said Biden plans to announce fresh initiatives to help student loan borrowers when he speaks later Friday.
Program was not authorized: Chief Justice Roberts
Chief Justice John G Roberts Jr., writing for the conservative majority stated that the administration's cited statute did not authorize the program. According to Roberts, the question in the case was whether the Higher Education Relief Opportunities for Students Act, 2003—or the HEROES Act—authorized the Secretary of Education to establish a student loan forgiveness program capable of canceling half a trillion dollars in debt.
'Absolute betrayal to 40 million student loan borrowers'
Commenting on the ruling, Persis Yu, deputy executive director at the Student Borrower Protection Center, an advocacy group, said, "Today's decision is an absolute betrayal to 40 million student loan borrowers counting on an impartial court to decide their financial future based upon the established rule of law."
Biden announced plans for scheme last year
In August 2022, Biden announced that the US government would erase up to $10,000 in federal student debt for Americans earning less than $125,000 who took out loans to pay for college and other post-secondary education. Another $20,000 would be for Pell Grants recipients from low-income families. Soon after the announcement, lower courts blocked it and it had been on hold since November.
