Menu Close

US Supreme Court blocks Biden’s $430bn student debt relief plan

*The United States’ Supreme Court rules that President Joe Biden has overstepped his  powers in cancelling over $400 billion in cancelling student debt of millions of Americans

*Biden, 3 Justices disagree with the Court’s decision

Isola Moses | ConsumerConnect

President Joe Biden’s student debt relief programme has suffered a major political setback as the United States (US) Supreme Court overruled  the administration’s landmark scheme to cancel the outstanding student debt of millions of Americans.

The Supreme Court Tuesday, June 27, 2023, ruled that President Biden had overstepped his  powers in cancelling over $400billion in debt.

US President Joe Biden 

ConsumerConnect reports the administration’s student debt relief plan is aimed alleviate the financial burden of education that hangs over many Americans decades after they finished their studies.

Almost 43 million Americans hold $1.6 trillion in Federal student loans, and some end up repaying them over decades as they start jobs and families after their education.

However, the conservative-dominated court voted six to three in the ruling, saying the President should have obtained specific authorisation from Congress to launch the programme, agency report said.

The Court also ruled that Biden was mistaken in using a 2003 law, the Higher Education Relief Opportunities for Students Act, to justify the debt relief plan.

Justices’ 6-3 decision on matter

Six Republican-led states had sued, arguing the 2003 Act, which aimed to help former students who joined the US Military after the September 11, 2001, attacks, does not authorise Biden’s loan cancellation.

Chief Justice John Roberts wrote in the majority opinion: “We agree.

“The question here is not whether something should be done; it is who has the authority to do it.”

Justice Roberts also noted the Heroes Act “does not allow” the administration “to rewrite that statute to the extent of cancelling $430billion of student loan principal.”

Biden ‘strongly’ disagrees with Supreme Court’s decision -White House source

In the administration’s reaction to the US Supreme Court’s decision on the student debt relief programme, a White House source, on the condition of anonymity, said shortly after the ruling, that Biden “strongly” disagreed with the decision, and would later “make clear he’s not done fighting yet.”

It is recalled that the US President, while announcing the plan August 2022, disclosed up to $20,000 per borrower — only those from low or middle-income groups — would be forgiven the student debt overhang.

The plan came on the back of a student loan payment freeze instituted by his predecessor Donald Trump during the Coronavirus (COVID-19) pandemic in the American country.

Nonetheless, the Supreme Court Tuesday said Biden did not have the power to unilaterally, erase so much debt.

According to the ruling, such power is held by Congress, which oversees US finances.

Justice Neil Gorsuch also wrote: “Among Congress’s most important authorities is its control of the purse” in the United States.

3 Justices disagree on ruling against Biden’s student debt relief plan

The court’s three progressive Justices all dissented in the decision.

Justice Elena Kagan, one of the dissenting Justices of the US Supreme Court on the majority decision, wrote that the court itself was overstepping its powers in the case, report noted.

The Judge argued that none of the states who sued to challenge Biden’s policy had standing to do so — they neither had a personal stake nor incurred an injury by the policy.

“We do not allow plaintiffs to bring suit just because they oppose a policy,” she Justice Kagan as well contended the 2003 Act does permit the policy, and that the court anchored its decision mainly on the very size of the debt cancellation and its impact on national finances.

Kagan further stated: “The result here is that the court substitutes itself for Congress and the executive branch in making national policy about student-loan forgiveness.”

Kindly Share This Story





Kindly share this story