Supreme Court Blocks Biden Student Loan Forgiveness Plan

The Supreme Court voted to block President Joe Biden’s student loan forgiveness plan on Friday which would have canceled federal student loans for up to 43 million Americans.

In a 6-3 decision court agrees with the six states that the HEROES Act does not authorize the debt forgiveness plan. In the other student loan case, Dept of Education v. Brown. the court found that the challenger did not have standing.

The court held that the administration needs Congress’ endorsement before undertaking so costly a program. The majority rejected arguments that a bipartisan 2003 law dealing with student loans, known as the HEROES Act, gave Biden the power he claimed.

The plan Biden announced would have canceled $10,000 in federal student loan debt for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, would have received an additional $10,000 in debt forgiveness, for a total of $20,000. A borrower would qualify If their federal student loans were disbursed before July 1st.

According to an estimate by the Congressional Budget Office, Biden’s plan for student debt cancellation would cost the federal government about $400 billion over the next 30 years. The office clarified thought that the estimates were uncertain because it’s hard to know exactly how much borrowers would have paid in the future. The pause on student loans began during the COVID-19 pandemic in March 2020 under President Trump. It was extended nine times under Trump and Biden but will expire in the fall with interest rates accruing starting September 1.

This is a developing story, refresh for updates.