This is a developing story and will be updated as more information becomes available.
The Supreme Court of the United States ruled in a 6-3 decision Friday morning to block President Joe Biden’s proposed plan to provide student debt relief for low and middle class borrowers. This decision comes just a day after the court’s decision to end affirmative action in higher education. Biden’s plan, announced last August, would have provided up to $10,000 in student debt relief to individuals earning less than $125,000 per year or households earning less than $250,000 per year, and up to $20,000 in additional loan forgiveness to Pell Grant recipients.
During oral arguments, lawyers for the Biden administration argued the debt relief program was justified under the 2003 Higher Education Relief Opportunities for Students Act in light of the COVID-19 pandemic. Delivering the court’s majority opinion, Chief Justice John Roberts said the court decided that Biden’s plan is not covered by the HEROES Act and represents an act of executive overreach.
“We hold today that the (HEROES) 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 Secretary’s new ‘modifications’ of these provisions were not ‘moderate’ or ‘minor.’ Instead, they created a novel and fundamentally different loan forgiveness program.”
Roberts emphasized that the court’s decision is not focused on the merits of the program, but rather on what branch of government has the constitutional authority to enact it.
“The question here is not whether something should be done; it is who has the authority to do it,” Roberts wrote.
Justice Elena Kagan, joined by Justice Sonia Sontomayor and Justice Ketanji Brown Jackson, wrote the dissenting opinion. Kagan said she believes the case should not have been brought to the Supreme Court in the first place.
“The plaintiffs here are six States: Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina,” Kagan wrote. “They oppose the Secretary’s loan cancellation plan on varied policy and legal grounds. But as everyone agrees, those objections are just general grievances; they do not show the particularized injury needed to bring suit.”
Kagan added that she finds it is well within Biden and Cardona’s authority to institute such a program.
“The statute Congress enacted gives the Secretary broad authority to respond to national emergencies” Kagan wrote. “That authority kicks in only under exceptional conditions. But when it kicks in, the Secretary can take exceptional measures … That means when an emergency strikes, the Secretary can alter, so as to cover more people, pre-existing provisions enabling loan discharges. Which is exactly what the Secretary did in establishing his loan forgiveness plan.”
In 2021, 19% of University of Michigan undergraduate students were Pell Grant recipients, with a median family income of $154,000 across the entire University. Even on a relatively wealthy like the University’s, a significant number of students would have been eligible to receive aid under Biden’s proposed forgiveness plan.
In an email to The Michigan Daily, University spokesperson Rick Fitzgerald said this morning’s Supreme Court decisions would not have any immediate impact on U-M students with regard to financial aid or student loans.
“The university follows federal guidelines regarding financial aid and student loans,” Fitzgerald said. “The Supreme Court decision released today regarding federal student loan forgiveness will not lead to any immediate special directions or considerations for U-M students or graduates.”
Summer Managing News Editor Mary Corey can be reached at mcorey@umich.edu.