Supreme Court strikes down Biden’s $10,000 student loan forgiveness plan
After lower courts ruled against the president’s sweeping student loan forgiveness plan, the high court has put an end to the controversial debt-relief plan which drew plenty of legal challenges.
Today, the Supreme Court – in its final day of rulings for the term – tossed out President Joe Biden’s plan to forgive the student debt of more than 40 million people, rejecting one of his signature initiatives, after lower courts blocked the plan. After hearing arguments in February, it seemed unlikely that the justices would rule in favor of the plan.
The justices, voting 6-3, sided with six Republican-led states that sued to challenge the program, which by one estimate would have cost $430 billion over 30 years. Conservative Chief Justice John Roberts wrote the ruling over a dissent from the court’s three liberals: “From a few narrowly delineated situations specified by Congress, the secretary has expanded forgiveness to nearly every borrower in the country,” he said, referring to the U.S. education secretary.
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.
The sweeping package of student-debt relief that would have forgiven as much as $20,000 in loans for lower-income families who also receive Pell grants. For most student-loan holders, the limit would have been $10,000 for Americans making under $125,000.
Related: Senate unveils student loan bill, ahead of Supreme Court ruling on debt forgiveness
Student loan payments are set to resume in late August after a three-year pause.
While awaiting the Supreme Court decision, the Biden administration, announced another student loan plan in January: The new plan, called the Revised Pay As You Earn (REPAYE) program, is an overhaul of a student loan program first introduced in 2016. It features income-driven repayment plans, or IDRs, which are designed to help make student loans more manageable by tying a person’s monthly payment to their income.