Supreme Court blocks student loan forgiveness in blow to Biden. Here's what to know about the ruling. By Melissa Quinn Updated on: June 30, 2023 / 12:55 PM / CBS News 1/2
Washington — The Supreme Court on Friday invalidated President Biden's student loan forgiveness plan, ruling that a 2003 federal law does not allow the program to wipe out nearly half-a-trillion dollars in debt.
The 6-3 decision by the court's conservative majority derails a major campaign pledge from the president, denying relief to roughly 40 million Americans who stood to have up to $20,000 in student debt wiped away under the plan.
In a statement, the president said he believed the decision was "wrong" and "disappointing." He said he will address the nation Friday afternoon and lay out "more detail on all that my Administration has done to help students and the next steps my Administration will take."
"I will stop at nothing to find other ways to deliver relief to hard-working middle-class families," Mr. Biden said. "My Administration will continue to work to bring the promise of higher education to every American."
The court's student loan ruling
Before striking down the plan, the Supreme Court first said Missouri, one of the six states that challenged the lawfulness of the plan, had the right to sue, known as legal standing. That finding allowed the court to consider whether the secretary of education had the power to forgive student loan debt under a law known as the HEROES Act.
The court, in a majority opinion authored by Chief Justice John Roberts, said the law does not grant the secretary that authority.
"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 court invoked the so-called "major questions" doctrine in part of its ruling, a legal theory that holds there must be clear congressional authorization for an executive branch agency to decide an issue of "vast economic or political significance."
The "economic and political significance" of the loan forgiveness plan, Roberts wrote, "is staggering by any measure."
"Today, we have concluded that an instrumentality created by Missouri, governed by Missouri, and answerable to Missouri is indeed part of Missouri; that the words 'waive or modify' do not mean 'completely rewrite'; and that our precedent — old and new—requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy," he concluded.
Roberts ended his opinion by noting that the disagreement among the court's members should not be mistaken for disparagement. "It is important that the public not be misled either," he cautioned. "Any such misperception would be harmful to this institution and our country."
Justice Elena Kagan authored the dissenting opinion, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson and summarized from the bench. "In every respect, the court today exceeds its proper, limited role in our nation's governance," she wrote.
The dissenting justices split from the majority regarding not only the legality of the relief plan, but also with its finding that the states had the right to sue. In deciding the case at all, Kagan said the court overreached.
"The result here is that the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness," Kagan said.
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