Supreme Court Throws Out Biden's Student-Loan Relief Plan

What You Need to Know

Student loan payments are set to resume in late August after a three-year pause.
The justices, voting 6-3 along ideological lines, sided with six Republican-led states that sued to challenge the program.
According to one estimate, the program would have cost $400 billion over 30 years.

The U.S. Supreme Court tossed out President Joe Biden’s plan to slash the student debt of more than 40 million people, rejecting one of his signature initiatives as exceeding his power.

The justices, voting 6-3 along ideological lines, sided with six Republican-led states that sued to challenge the program, which by one estimate would have cost $400 billion over 30 years.

Writing for the court, Chief Justice John Roberts said the administration was “seizing the power of the legislature” by trying to cancel so much student debt.

Biden is likely to face renewed pressure from lawmakers and loan-relief advocates to find an alternative way to cancel debt, possibly using a different legal rationale.

For now, the high court ruling strips him of an accomplishment as he looks toward his reelection bid next year. Biden is expected to speak about options later Friday.

Student loan payments are set to resume in late August after a three-year pause. Millions of people could fall behind on their debt.

“This fight is not over,” said U.S. Senator Elizabeth Warren, a Massachusetts Democrat and proponent of the relief plan. “The president has more tools to cancel student debt — and he must use them.”

The three liberals in dissent said that the states lacked the legal right to challenge the loan relief and that Congress authorized the forgiveness plan. “In every respect, the court today exceeds its proper, limited role in our nation’s governance,” Justice Elena Kagan wrote for the dissenters.

The conservative-dominated Supreme Court has thwarted Biden’s agenda on multiple occasions.

The court stopped Biden from blocking evictions during the pandemic and requiring workers to get Covid vaccines or regular tests. The justices have also slashed the Environmental Protection Agency’s power to address climate change and protect wetlands.

Biden’s plan would have forgiven as much as $20,000 in federal loans for certain borrowers making less than $125,000 per year, $250,000 for households.

“Biden’s student loan bailout unfairly punished Americans who already paid off their loans, saved for college, or made a different career choice,” Republican National Committee Chairwoman Ronna McDaniel said in a statement. “Americans saw right through this desperate vote grab, and we are thankful that the Supreme Court did as well.”