Today, the Supreme Court issued its 6-3 decision striking down the Administration’s student loan debt forgiveness plan. President Biden’s initiative would have forgiven up to $20,000 in federal student loan debt for more than 40 million Americans. Advocates for student debt relief are calling on the White House to create an alternative plan using different legal authority, such as through the Higher Education Act.
The Supreme Court ruled the State of Missouri has standing to bring its case forward as it created MOHELA, which is “an instrumentality of the State of Missouri” and would face a direct injury if the student loan forgiveness moved forward, losing $44 million in fees.
The Court found that the Department relied on the HEROES Act to “waive or modify” existing statutory or regulatory provisions applicable to financial assistance programs under the HEA, allowing the Secretary to provide loan forgiveness under certain circumstances, but the Secretary exceeded his authority by rewriting that statute to the extent of canceling $430 billion of student loan principal.
The opinion was written by Chief Justice Roberts who highlighted the major questions doctrine – whether it is Congress or a federal agency that has the power to offer a student loan forgiveness program, stating that if Congress wants to give an administrative agency the power to make “decisions of vast economic and political significance,” it must say so clearly. But here there is no authorization, much less clear authorization, for this program.
The opinion may be accessed here. A statement from President Biden may be accessed here.