Supreme Court rejects Biden’s plan to wipe away $400 billion in student loans

LINCOLN, Neb. (KLKN) — The Supreme Court ruled Friday that the Biden administration overstepped its authority in trying to cancel or reduce student loans for millions of Americans.

The 6-3 decision, with conservative justices in the majority, effectively killed the $400 billion plan and left borrowers on the hook for repayments that are expected to resume by late summer.

The court held that the administration needs Congress’ endorsement before undertaking so costly a program.

The majority rejected arguments that a bipartisan 2003 law dealing with student loans provided the authority Biden claimed.

But on Friday, President Joe Biden said he’s going to keep trying.

“I’m not going to stop fighting to deliver borrowers what they need,” he said.

Biden’s plan would have covered up to $10,000 of student debt for anyone earning less than $125,000 a year.

It would’ve also forgiven another $10,000 for anyone who received Pell Grants.

Nebraska Attorney General Mike Hilgers was of the plaintiffs who sued over the plan.

He said it’s important to remember the separation of powers between the branches of government, no matter the subject.

“My wife and I had two sets of student loans when we first got married,” he said. “I understand the struggle. But I would say beyond that, there is a right way and a wrong way in our system of government, and the ends don’t justify the means. The right way is to go through Congress.”

The court’s three dissenters said the decision overrides the judgment of the legislative and executive branches of government.

Abby Shafroth, co-director of advocacy with the National Consumer Law Center, said millions of struggling Americans were counting on the loan forgiveness at a time when inflation is already raising costs.

“The people who are hurt most today are the people who don’t come from families with money,” she said. “People from low-income families who sought an education, that’s who’s really hurting today.”

The Biden administration said 26 million people had already applied for relief under his program, out of about 43 million who were eligible.