Student debt relief advocates demonstrate outside the US Supreme Court on June 30, 2023 in Washington, DC.
Olivier Douliery | AFP | Getty Images
The Supreme Court killed President Joe Biden on Friday student loan forgiveness planand denied tens of millions of Americans the chance to get up to $20,000 of their debt wiped out.
The 6-3 majority ruled that at least one of the six states that challenged the loan relief program had a proper legal basis, the so-called standingmake it so.
The Supreme Court said the president did not have the authority to order his education secretary to cancel such a large amount of consumer debt without Congressional authorization, and agreed that the program would harm the plaintiffs.
“Can the Secretary use his powers to cancel $430 billion in student loans and completely write off loan balances for 20 million borrowers as the pandemic comes to an end?” wrote Chief Justice John Roberts in the majority opinion for Biden v. Nebraska. . “We can’t believe the answer is yes.
Financial experts have expressed concern about what could come next for borrowers.
The U.S. Department of Education recently warned that pushing people to repay after a more than three-year hiatus and a pandemic that has eroded the financial security of many households without Biden canceling the loan could spark a historic surge in delinquencies and defaults.
Consumer advocates criticized the ruling, accusing the court of bias.
“Today’s decision is an absolute betrayal of the 40 million student loan borrowers who count on an impartial court to decide their financial futures based on the established rule of law,” he said. Persis Yudeputy executive director at the Student Borrower Protection Center, an advocacy group.
Last August, under pressure from other Democrats, consumer advocates and borrowers to fix a loan system they described as broken and predatory, Biden announced he would cancel up to $10,000 of federal student debt for most borrowers and up to $20,000 for those who In college, I received a Pell Grant, a form of aid for low-income families.
When the Biden administration unveiled its loan forgiveness plan, too issued a 25-page report The US Justice Department says its help was authorized by the Heroes Act of 2003 – a product of the 9/11 terrorist attacks, which gives the president broad authority to review student loan programs during national emergencies. The country worked atas part of the declaration of a state of emergency due to COVID-19 in time, when.
However, the administrative pardon application had been open for less than a month when a flurry of legal challenges forced them to close it. Biden’s plan has now faced at least six lawsuits from Republican-backed states and conservative groups, most of which accuse him of overreaching the executive branch.
Two of those legal challenges made it all the way to the Supreme Court: one filed by six Republican-led states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — and another backed by the Job Creators Network Foundation, a conservative advocacy group.
The judges heard oral arguments about these cases at the end of February.
— CNBC’s Kevin Breuninger contributed to this story.
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