Supreme Court Overturns Joe Biden's Student Loan Debt Forgiveness Plan

The decision will force the 26 million Americans who applied for forgiveness to pay their loans in full.

The six conservative justices on the Supreme Court ruled that President Joe Biden’s student loan debt forgiveness plan is unconstitutional on Friday.

The 6-3 decision written by Chief Justice John Roberts means that the 26 million Americans who signed up for the debt forgiveness program will no longer have their debt partially or fully wiped away.

Biden announced his plan to forgive up to $20,000 in student loan debt for more than 40 million loan holders in August 2022. The plan authorized $20,000 in relief to Pell Grant recipients and $10,000 in relief to other borrowers who made less than $125,000 a year in 2020 or 2021. In authorizing the forgiveness plan, Biden cited his authority under the 2003 HEROES Act, passed in the wake of 9/11, to “waive” or “modify” student loan debt terms during a national emergency ― in this case, the COVID-19 pandemic.

But the court disagreed. Roberts’ opinion ― joined by conservative Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett ― declared that Biden lacked the authority under the HEROES Act to eliminate student loan debt.

“We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up,” Roberts wrote.

“The authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them,” he added.

Roberts further stated that the “modifications” to student loan payments were not “moderate” or “minor,” as his definition of “modify” required. Instead, “they created a novel and fundamentally different loan forgiveness program.”

The ruling also declared the debt forgiveness plan to be in violation of the court’s so-called major questions doctrine.

This doctrine allows the court to declare an executive branch policy that the court thinks wasn’t authorized by Congress to be unconstitutional if a majority of justices agree that it is too “major” a policy. Its application is highly subjective.

The major question doctrine acts as a “get-out-of-text-free card” that conservative justices make “magically appear” whenever they see an executive branch policy that goes against their ideological “goals,” Justice Elena Kagan wrote in a dissent in the 2022 case of West Virginia v. EPA.

While the HEROES Act rather plainly states that the president may “waive” or “modify” the terms of student loan debt held by the government, the court’s conservatives decided that Congress did not mean that the president could forgive debt. The plan to provide debt relief was unconstitutionally “major.”

The court concluded “that ‘[t]he basic and consequential tradeoffs’ inherent in a mass debt cancellation program ‘are ones that Congress would likely have intended for itself,’” Roberts wrote, quoting from the West Virginia v. EPA decision.

In dissent, Kagan ― joined by liberal Justices Sonia Sotomayor and Ketanji Brown Jackson ― ripped the majority opinion for exceeding “its proper, limited role in our Nation’s governance.”

“Some 20 years ago, Congress enacted legislation, called the HEROES Act, authorizing the Secretary of Education to provide relief to student-loan borrowers when a national emergency struck,” Kagan wrote.

That law allowed the secretary to “do only what was ‘necessary’ to alleviate the emergency’s impact on affected borrowers’ ability to repay their student loans,” she added.

The secretary could “waive or modify any statutory or regulatory provision” and “replace the old provisions with new ‘terms and conditions,’” Kagan wrote.

“That may have been a good idea, or it may have been a bad idea,” she noted. “Either way, it was what Congress said.”

But instead, “the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness,” Kagan wrote.

“The majority’s cardinal error is reading ‘modify’ as if it were the only word in the statutory delegation,” Kagan said. Rather, it must be read as “one part of a couplet: ‘waive or modify,’” with “waive” meaning “eliminate.”

“Would Congress have given the Secretary power to wholly eliminate a requirement, as well as to relax it just a little bit, but nothing in between?” Kagan asked. “The majority says yes. But the answer is no, because Congress would not have written so insane a law.”

In applying the major questions doctrine, Kagan declared that “the Court puts its own heavyweight thumb on the scales,” by questioning “‘who has the authority’ to make such significant calls.”

“The answer, as is now becoming commonplace, is this Court,” Kagan wrote.

The major questions doctrine as deployed by this majority, Kagan stated, makes the court “the arbiter—indeed, the maker—of national policy.”

“That is no proper role for a court,” Kagan wrote. “And it is a danger to a democratic order.”

Roberts strenuously disagreed, arguing back at Kagan: “The 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.”

Kagan also argued that the court should not have issued a decision in the case at all because the state plaintiffs could not prove a harm from the debt relief plan and, therefore, lacked standing to sue. The majority opinion, however, granted standing to Missouri after it argued that the student loan debt servicer MOHELA would not be able to make certain payments to state government coffers due to the relief plan.

In a separate opinion on a challenge to the policy brought by two students, the court dismissed the case for lack of standing.

The Biden administration previously refused to put forward a “Plan B” in case the court invalidated the program.

On Friday afternoon, Biden announced that his administration had begun the process of seeking student loan debt relief under the authority granted in the Higher Education Act.

As for court’s decision, Biden said: “I think the court misinterpreted the Constitution.”

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