US President Joe Biden on Friday (June 30) suffered a significant political setback as US Supreme Court overruled his key program to cancel student loans of millions of Americans.
The court said Biden had overstepped his powers in cancelling more than $400 billion in debt, in an effort to alleviate the financial burden of education that hangs over many Americans decades after they finished their studies.
The conservative-dominated Supreme Court voted six to three in the ruling. The court said that the president should have obtained specific authorization from US Congress to launch such a program.
The court said Biden was mistaken in using a 2003 law, the Higher Education Relief Opportunities for Students Act, to justify the debt relief plan.
Six Republican-led states sued saying the 2003 act, which aimed to help former students who joined the military after the September 11, 2001 attacks, does not authorize Biden’s loan cancellation.
“We agree,” Chief Justice John Roberts wrote in the majority opinion.
“The question here is not whether something should be done; it is who has the authority to do it,” he said.
Nearly 43 million Americans have USD 1.6 trillion in federal student loans. Some of them would end up repaying them over decades as they do their jobs and raise families.
Biden announced the student loan cancellation plan in August 2022. He said that up to USD 20,000 per borrower would be forgiven, given that the borrower comes from low or middle-income groups.
The plan came on the back of student loan payment freeze instituted by his predecessor Donald Trump during the Covid-19 pandemic.
But US Supreme Court has said that Biden didn’t have power to unilaterally waive so much debt. The court said that this power is held by US Congress, which is in charge of US finances.
“Among Congress’s most important authorities is its control of the purse,” wrote Justice Neil Gorsuch.
Justice Elena Kagan wrote that the court itself was overstepping its powers in the case.
She argued that none of the states who sued to challenge Biden’s policy had standing to do so — they neither had a personal stake or incurred an injury by the policy.
“We do not allow plaintiffs to bring suit just because they oppose a policy,” she said.
Biden not happy
Biden made his displeasure clear after the Supreme Court verdict. He said that he “strongly” disagrees with the decision that ended his plan to forgive billions in federal student loans, reported AFP citing a White House source.
Biden will later “make clear he’s not done fighting yet,” said the source, speaking on condition of anonymity.
(With inputs from agencies)
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