The U.S. Supreme Court has ruled against the Biden administration’s student loan debt relief program, stating that federal law does not permit the Secretary of Education to cancel over $430 billion in student loan debt. The 6-3 decision was announced on Friday.
“The Secretary’s plan canceled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600,” Chief Justice John Roberts wrote for the majority. “Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”
The initiative, which had been on hold pending litigation, proposed that the federal government provide up to $10,000 in debt relief, and up to $20,000 for Pell Grant recipients, for individuals earning less than $125,000 a year. The program was projected to cost the government more than $400,000.
President Biden initiated the push for debt cancellation in August 2022, and his administration accepted approximately 16 million applications before Republicans objected and the program was put on hold. Republicans contended that Biden lacked the authority to unilaterally forgive student loans. The Congressional Budget Office estimated that Biden’s plan would cost taxpayers roughly $400 billion.
In anticipation of a ruling against the administration, Biden’s Education Department had already been exploring potential alternatives to offer relief via other means. Meanwhile, Republicans introduced their own plan to address student loans and high college costs in June, proposing a series of five bills.
