Supreme Court Strikes Down Biden's Student Loan Forgiveness Plan

The United States Supreme Court struck down President Joe Biden's student loan forgiveness plan. In a 6-3 ruling, the Court ruled that the program was an unconstitutional use of presidential power because the program was not authorized by Congress.

"The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not," Chief Justice John Roberts wrote. "We hold today that the Act allows the Secretary to 'waive or modify' existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up."

Biden's plan would have provided between $10,000 and $20,000 in relief to millions of borrowers, costing about $400 billion.

The ruling comes as millions of Americans are preparing to restart payments on their loans, which had been suspended in 2020 due to the coronavirus pandemic. The Department of Education said that loans will start accruing interest again in September, and the first payments will be due in October.

After the ruling, President Biden unveiled a series of actions he was taking to help provide debt relief to student loan borrowers.

"I know millions of Americans in this country who feel disappointed and discouraged and even a little bit angry about the Court's decision today on student debt, and I must admit I do too," he said.

Biden said that Education Secretary Miguel Cardona would work with borrowers to "compromise, waive or release loans under certain circumstances." Biden cautioned that the new program, which relies on the Higher Education Act of 195, will take time to implement

"We're not going to waste any time on this," Biden said. "We're getting moving on it. It's going to take longer, but we're getting at it right away."

To help borrowers facing student loan bills for the first time in three years, Biden said that the Department of Education is creating a 12-month on-ramp to help borrowers who must begin repaying their loans in October. During the first year, borrowers who miss payments while not accrue penalties and will not have their debt reported to collection agencies.