The Supreme Court struck down President Joe Biden’s plans to offer a taxpayer-funded bailout to millions of student loan borrowers without congressional approval.
In a 6-3 decision handed down at the end of the summer term Friday, the high court ruled President Biden’s plan to forgive $20,000 for Pell Grant recipients and $10,000 for other borrowers under a certain income ceiling was unconstitutional. The White House initiative would have cost taxpayers more than $400 billion over 30 years to bail out more than 43 million borrowers.
Six states challenged the president’s student loan program last fall, provoking a preliminary injunction by the Eighth Circuit Court in Biden v. Nebraska. The six justices in the majority on the court ruled the president does not have the power to authorize such a large payout without Congress signing off.
“The question here is not whether something should be done; it is who has the authority to do it,” wrote Chief Justice John Roberts, who wrote the majority opinion. “Our recent decision in West Virginia v. EPA involved similar concerns over the exercise of administrative power.”
In its decision on the EPA case exactly one year ago, the Supreme Court checked the administrative state’s power, ruling that executive agencies don’t have the power to implement rules with wide-ranging effects in excess of their authority established by Congress.
“So too here, where the Secretary of Education claims the authority, on his own, to release 43 million borrowers from their obligations to repay $430 billion in student loans,” Roberts wrote in Friday’s decision. “The Secretary has never previously claimed powers of this magnitude under the HEROES Act. … The Act has been used only once before to waive or modify a provision related to debt cancellation.”
Roberts ruled that Biden’s plan to forgive $430 billion cannot qualify as a “waiver” because the program “does not remotely resemble how it has been used on prior occasions.”
Roberts cited a time in 2003 when the education secretary eased the requirement for those seeking loan forgiveness via a public service program to engage in “uninterrupted” service.
“In sum, ‘[n]o regulation premised on’ the HEROES Act ‘has even begun to approach the size or scope’ of the Secretary’s program,” Roberts ruled, writing that the administration’s plan for loan forgiveness is “staggering by any measure.”
Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett concurred with the majority opinion. The three Democrat-appointed justices on the high bench, Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson, dissented.
Justice Kagan wrote the minority opinion and claimed the majority exceeded their own authority by taking the case at all.
“At the behest of a party that has suffered no injury, the majority decides a contested public policy issue properly belonging to the politically accountable branches and the people they represent,” Kagan wrote.
“No proper party is before the court,” she added. “A court acting like a court would have said as much and stopped.”
The student loan case caps off a consequential term for the high court. On Thursday, justices ruled race-based affirmative action programs in higher education unconstitutional under the 14th Amendment. Earlier Friday morning, the court declared government could not compel speech from business owners that violates their religious beliefs.