Supreme Court kills Biden's student debt plan in a setback for millions of borrowers
The court unanimously dismissed on standing grounds a challenge to President Biden's groundbreaking plan to forgive some or all federal student loan debt for tens of millions of Americans.
Updated June 30, 2023 at 10:42 AM ET
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In a highly anticipated decision, the Supreme Court on Friday struck down President Biden's groundbreaking plan to forgive some or all federal student loan debt for tens of millions of Americans.
By a 6-to-3 vote on ideological lines, the high court ruled that federal law does not authorize the Department of Education to cancel such student loan debt.
Writing for the majority, Chief Justice John Roberts said: "The authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them."
Siding with the states, Justice Amy Coney Barrett said, in her concurring opinion, said the major questions doctrine "reinforces" the majority's conclusion "but is not necessary to it."
In her dissent, Justice Elena Kagan criticized the court's "overreach, and noted she would have decided the states didn't have the right to sue.
"The plaintiffs in this case are six States that have no personal stake in the Secretary' loan forgiveness plan," she said. "They are classic ideological plaintiffs: They think the plan a very bad idea, but they are no worse off because the Secretary differs."
Last August, President Biden told federal student loan borrowers that the U.S. government would cancel up to $20,000 of debt for low income students who had received a Pell Grant to attend college, and up to $10,000 for the vast majority of remaining borrowers. He cited a 2001 law that allows the Secretary of Education "to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies." That is the same law that President Trump used to freeze federal student loan payments and interest accrual due to the COVID pandemic.
Soon after Biden's announcement, however, six states filed a lawsuit to stop the implementation of the debt cancellation plan, arguing that Biden exceeded his authority under the federal law. The Supreme Court ultimately stepped in to review the case.
The high court's ruling signifies another example of its expanding use of the "Major Questions Doctrine," the idea that Congress must speak very clearly when granting power to executive agencies like the Department of Education to make decisions about issues that are politically or economically significant. And, as the doctrine says, if there is any ambiguity to whether Congress has granted this power, courts should not presume that Congress did so. Last year, the high court struck down the Secretary of Labor's vaccine mandate on these grounds.
The decision comes as a disappointment to federal student loan borrowers who were eligible for relief under the plan — as many as 43 million borrowers, or roughly 1 in 8 Americans.
Come fall, student loan interest accrual and payments will begin again, affecting borrowers in all 50 states.
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