U.S. Supreme Court blocks Biden student loan forgiveness

Washington, The Gulf Observer: The U.S. Supreme Court handed President Joe Biden a painful defeat on Friday, blocking his plan to cancel $430 billion in student loan debt – a move that had been intended to benefit up to 43 million Americans and fulfill a campaign promise.

The justices ruled against Biden in a 6-3 decision favoring six conservative-leaning states that objected to the policy. The court’s action dealt a blow to the 26 million U.S. borrowers who applied for relief after Biden announced the plan in August 2022 and represented a political setback for the Democratic president.

Chief Justice John Roberts, joined by the court’s five other conservative members, wrote the ruling. The court’s three liberals dissented.

Roberts derided the Biden administration’s argument that the loan forgiveness program was merely a modification of an existing program and noted that such broad action would require clear congressional approval.

“The secretary’s plan has ‘modified’ the cited provisions only in the same sense that the French Revolution ‘modified’ the status of the French nobility’ – it has abolished them and supplanted them with a new regime entirely,” Roberts wrote, referring to U.S. Secretary of Education Miguel Cardona.

“From a few narrowly delineated situations specified by Congress, the secretary has expanded forgiveness to nearly every borrower in the country,” Roberts said.

The court’s ruling invoked what is called the “major questions” doctrine, a muscular judicial approach that gives judges broad discretion to invalidate executive agency actions of “vast economic and political significance” unless Congress clearly authorized them in legislation.

Biden plans to announce new actions to protect student loan borrowers in the wake of the ruling, a White House source said, speaking on condition of anonymity.

“While we strongly disagree with the court, we prepared for this scenario,” the source said, noting that Biden would have more to say on the subject later on Friday.

“The president will make clear he’s not done fighting yet,” the source added.

Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina challenged Biden’s debt relief. Two individual borrowers had also opposed the plan’s eligibility requirements but the justices dismissed their challenge on Friday due to a lack of legal standing. The court acted on its final day of rulings in its term that began in October.

Twenty-six million U.S. borrowers applied for relief between when Biden announced the plan in August 2022 until last November, when lower courts blocked the plan.