The U.S. Supreme Court ruled Friday that the Biden administration’s student loan forgiveness plan is unconstitutional. The decision means that payments on full loan balances will resume in October, affecting nearly 1.4 million Texans.
poised to have some or all their student debt canceled by the federal government will have to continue paying off their loan balances after the U.S. Supreme Court ruled Friday that the Biden administration’s student loan forgiveness plan is unconstitutional.
“The HEROES Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, but does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal,” Chief Justice John Roberts wrote in the majority opinion.It is a major blow for Biden, who promised during his presidential campaign that if elected he would address student debt.
Under Biden’s plan, individuals earning $125,000 or less annually would see $20,000 in student loan debt erased if they received a federal Pell Grant to help pay for college. Those who took out loans but did not qualify for those federal grants would have $10,000 eliminated from their student loan debt. The loan forgiveness program, which applies to borrowers regardless of whether they earned degrees, was halted in November as the cases made their way through the courts.
In 2021, 56% of students who graduated from four-year public universities in Texas had approximately $25,000 in student debt, according to the Texas Higher Education Coordinating Board. Biden’s decision to forgive more money for low-income students who qualified for federal Pell Grants would have especially impacted low-income borrowers and people of color, who are more likely to qualify for federal financial aid and carry higher amounts of student loan debt.
The Supreme Court heard two cases challenging Biden’s plan earlier this year. One was filed by six GOP-led states, not including Texas. In that lawsuit, the states argued that Biden used the pandemic as a pretext to deliver on a campaign promise, exceeding his authority as president. During oral arguments, the federal government argued that the states do not have standing to argue their case.
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