2023-07-01 02:22:17
Jessica Parker and Bernd Dubuschmann Jr, BBC
1 hour ago
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Activists and students demonstrate in front of the Supreme Court during a rally to cancel student debt
The US Supreme Court has invalidated President Joe Biden’s proposal to cancel billions in student debt.
The ruling effectively cancels the plan, which would have forfeited regarding $10,000 per borrower, and up to $20,000 in some cases.
The decision also affects the loans of more than 40 million Americans.
Biden said the matter angered the American public. He pledged to create new measures to reduce college student debt using other existing laws.
The loan forgiveness plan has been in limbo since some conservative states filed lawsuits, arguing that the president had overreached. The court confirmed this in its decision.
In the followingmath of the decision, Biden spoke from the White House, saying: “I know there are millions of Americans in this country who feel disappointed and frustrated or even a little angry. I must admit that I do too.”
But he pledged to work with the Ministry of Education to find other ways to help people reduce the financial burden.
He said, “Today’s decision closed one track. Now we will start another track.”
Total student debt has more than tripled over the past 15 years, rising from nearly $500 billion in 2007 to $1.6 trillion today.
The Biden administration has faced plaintiffs in two separate cases, one involving six Republican-led states of Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina, and the other involving two student borrowers.
In both cases, plaintiffs argued that the executive branch did not have the authority to cancel student debt on a large scale.
The Supreme Court ruled that the two individual student borrowers did not convincingly argue that they would be harmed by the loan forgiveness plan, effectively ruling that they had no legal standing to challenge the Biden administration’s proposal.
During that debate in February, the Biden administration said that under a 2003 law known as the Student Higher Education Relief Opportunity Act, or the Heroes Act, it has the power to “waiver or modify” loan provisions to protect borrowers affected by “a war, other military operation, or a national emergency.”
In its ruling, the Supreme Court ruled that the law allowed Education Minister Miguel Cardona to “make modest amendments and additions to existing provisions, not change them”.
Justice John Roberts wrote that the Biden administration’s amendments “created” a new and fundamentally different loan forgiveness program that “extended forgiveness to nearly every borrower” in the United States.
He added that the administration’s use of the Heroes Act “does not closely resemble how it has been used on previous occasions.”
Perhaps the Supreme Court’s ruling came on ideological grounds, as the three liberal justices disagreed.
In dissenting, Justice Elena Kagan writes, “The result here is that the court takes the place of Congress and the executive branch in setting national policy on student loan forgiveness.”
She wrote, “Congress approved the Tolerance Plan… (The Secretary of Education) put it into effect, and the President will be responsible for its success or failure.”
And she continued, “But today this court decides that regarding 40 million Americans will not get the benefits of the plan (as the court says), on the pretext that the assistance is too great.”
The White House had previously estimated that approximately 90 percent of student borrowers in the United States would qualify for assistance under this plan.
“This decision will affect a lot of people in this country. But it will disproportionately affect people who have been historically marginalized already,” Rannin Miao, a 22-year-old recent graduate, told the BBC outside the High Court.
“The people who get student loans are not the children of millionaires and billionaires. They are the children of working families,” said Miao, who declined to reveal the extent of his student debt.
Clegg Ivey told CBS, the BBC’s US partner, that the Supreme Court “made the right decision” and that he disagreed with the Biden administration’s approach to the issue.
“I have student loans and I certainly would have taken advantage,” he said. “But if that’s what we want, let’s talk to the congressman. Congress should really do its job.”
Poll data shows that support for the student loan forgiveness proposal has declined largely along political lines.
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A May Marquette University Law School poll showed 31 percent of Republicans favoring the proposal, compared with 69 percent of independents and 87 percent of Democrats.
Top Republican lawmakers were quick to applaud Friday’s Supreme Court ruling.
House Majority Leader Kevin McCarthy said the loan initiative was “illegal” and would mean Americans without student loans “no longer have to” pay those who do.
In total, nearly 43 million people in the United States owe money on student loans, or regarding one in six American adults with at least some post-secondary education.
Federal Reserve data shows the average student loan is regarding $17,000. And regarding 17 percent of borrowers owe less than $10,000, while only regarding seven percent owe more than $100,000.
Among those with high debts is Satra Taylor, a part-time student and activist for the Young Inventors group, which owes regarding $103,000. She told the BBC she expected this amount to grow as she continued her PhD programme.
“My family is not descended from hereditary wealth,” she said. “I had no other choice but to take out student loans to ensure I might put food on my table and pay the rent.”
And she concluded by saying, “I am deeply saddened by this decision … but I also hope that President Biden will ensure that student debt cancellation takes place.”
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