In a significant blow to President Joe Biden's agenda, the U.S. Supreme Court struck down his long-awaited student loan debt relief plan Friday, halting a key promise made during his campaign and leaving millions of Americans who expected thousands of dollars in financial relief stuck in uncertainty.
The Supreme Court justices delivered their ruling in a 6-3 vote Friday, deeming the program an overreach of presidential power that required approval from lawmakers in Congress. All six conservative justices voted in favor of the ruling, while all three judges appointed by Democratic presidents voted against it.
First announced in 2021, the Biden administration’s student loan plan sought to cancel $10,000 of student debt for over 40 million low-to-middle income borrowers. The program drew scrutiny from conservatives, leading multiple states to sue the Biden administration over the program’s legality.
Federal courts froze the student loan relief plan last November.
“The question here is not whether something should be done; it is who has the authority to do it,” Chief Justice John Roberts said in the decision. “The plan has modified the cited provisions only in the same sense that the French Revolution ‘modified’ the status of the French nobility — it has abolished them and supplanted them with a new regime entirely.”
The ruling sparked swift backlash from liberal politicians and student loan borrowers.
“To decide the case is to exceed the permissible boundaries of the judicial role,” Justice Elena Kagan said in her dissent. “It blows through a constitutional guardrail intended to keep courts acting like courts.”
Biden’s plan struck down Friday aimed to forgive student debt using provisions outlined in the HEROES Act, a piece of legislation enacted following the aftermath of the September 11th terrorist attacks.
In a speech Friday afternoon, Biden vowed to continue to pursue student loan forgiveness using other methods not targeted in the court’s ruling.
Facing just over one month before loan payments restart for the first time in over three years, Biden announced several steps in response to the Supreme Court's decision, including a new approach to provide debt relief under a different law — the Higher Education Act — and the creation of a 12-month "on-ramp" repayment program.
“I'm not going to stop fighting to deliver borrowers what they need, particularly those at the bottom end of the economic scale,” Biden said. “And we're moving as fast as we can.”
How does the student loan decision affect Wisconsin?
According to the White House, 465,000 Wisconsin residents applied for the program, though only 302,000 of those applications got sent to loan servicers before federal judges blocked the student debt relief program in November.
Over 740,000 Wisconsin residents have student debt totalling $24 billion.
“Students who don't depend on their parents but are still included in their FAFSA might get hit particularly hard by this decision," District 8 Ald. MGR Govindarajan, a rising senior at the University of Wisconsin-Madison, told the Cardinal. "Graduate or professional students will also have a harder time paying back loans.”
As part of Biden's plan, residents earning below $125,000 per year would have seen up to $10,000 in federal student loan debt cancellation, while recipients of federal Pell grants would have been eligible for up to $20,000 in forgiveness.
Govindarajan considers education an essential aspect of society that should be affordable given its importance to create an “economically stable life.”
“Future students might make decisions of where to go based on whether they'll be able to afford the loans or not, or make decisions on what career to follow because some have a better ability to pay back loans,” he added.
In February, Chancellor Jennifer Mnookin announced Bucky’s Pell Pathway, a plan that Mnookin says will be funded through a “variety of institutional, private and external sources.” The program is intended to remove barriers to education that plagued students on Pell Grants, Mnookin said at the time.
“I myself receive the Bucky's Tuition Promise, and I know that I wouldn't be able to afford college without that grant,“ Govindarajan said.
University officials included financial aid assistance programs in its request for the 2023-25 two-year state budget as they have in previous budget cycles. The request included $24.5 million for a Wisconsin Tuition Promise program to cover the full cost of attendance at any UW campus for in-state undergraduates from low-income families.
The university’s plans were rejected by the state’s Republican-controlled budget-writing committee earlier this year.
Ava Menkes is the state news editor at The Daily Cardinal. She has covered multiple stories about Wisconsin politics and written in-depth about nurses unions and youth voter turnout. Follow her on Twitter at @AvaMenkes.
Jasper Bernstein is the Associate News Editor for The Daily Cardinal. Follow him on Twitter at @jasperberns.
