The student debt relief plan prepared by President of the United States Joe Biden has been struck down in a 6-3 decision by the US Supreme Court but the White House has said, “This fight isn’t over.”
In a tweet today, the president remarked: “Some of the same elected Republicans who voted to overturn my student loan relief plan benefitted from thousands in pandemic relief loans to keep their own businesses open.” He said that now his adversaries wanted to deny a similar benefit to American students.
Yesterday, the US Supreme Court in its 6-3 decision, with its Republican-appointed conservative majority, rejected Biden’s plan to cancel some of the student debt for millions of people. In response, the president said in a tweet: “Unthinkable. This fight isn’t over.”
Biden also issued a statement: “I believe that the [Supreme] Court’s decision to strike down our student debt relief plan is wrong. But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families. My Administration will continue to work to bring the promise of higher education to every American.”
Speaking from the White House, the president said, “I know there are millions of Americans in this country who feel disappointed and discouraged or even a little bit angry. I must admit I do, too.” However, he also said, “Today’s decision has closed one path. Now we’re going to start another.” The indication was that the US Department of Education would try to find other ways to help with student debt.
A report in The New York Times noted that the “amount of student debt held in America has skyrocketed over the last half-century as the cost of higher education has continued to rise, growing substantially faster than the increase in most other household expenses”.
The student debt relief plan made by the Biden Administration would have given debt relief ranging from USD10,000 to USD20,000 to millions of people, depending on their household incomes and loan types.
Nearly 90 per cent of the relief from the plan would have gone to borrowers making less than USD75,000 a year, and none of it would have gone to people making more than USD125,000.
The Supreme Court ruling against the plan means that American households will have to soon start making the loan repayments, unless the US Congress takes some measure to keep the repayments in abeyance.
The NYT report added: “More than 45 million people [in the United States] collectively owe USD1.6 trillion — a sum roughly equal to the size of the economy of Brazil or Australia.” Nearly 26 million borrowers have applied to have some of their student loan debt erased, with 16 million applications approved, according to the report. “But no debts have been forgiven or additional applications accepted in light of the legal challenges,” it said.
In the Supreme Court proceedings, the Biden Administration had cited the provisions of a 2003 law — Heroes Act (short for the Higher Education Relief Opportunities for Students Act — to argue that his Administration could “waive or modify” loan provisions for borrowers who had been impacted by “a war or other military operation or national emergency”.
The Supreme Court ruled that the modifications made for the student debt relief plan by Education Secretary Miguel Cardona “created a novel and fundamentally different” programme that covered just about “every borrower” in the country.
The SC said that the way the Biden Administration was using the Heroes Act did not “remotely resemble how it has been used on prior occasions”.
The 6-3 ruling was delivered by six conservative and three liberal judges. Dissenting Justice Elena Kagan said that “the result here is that the [US Supreme Court] substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness”. She added, “Congress authorised the forgiveness plan… the [education secretary] put it in place; and the president would have been accountable for its success or failure… But this court today decides that some 40 million Americans will not receive the benefits of the plan (so says the court) that assistance is too ‘significant.’”
Biden said after the ruling that his Administration’s student debt relief plan would have been the lifeline that tens of millions of hardworking Americans needed as they tried to recover from a once-in-a-century pandemic. “And it would have been good for economic growth, both in the short- and long-term,” he said.
—With inputs from the Press Trust of India