Last week, the Supreme Court delivered a pivotal 6-3 ruling, invalidating President Joe Biden’s student loan debt relief plan on the grounds of an unlawful exercise of presidential power. In a decision that revealed ideological divides within the court, the majority did not argue against the essence of debt relief itself, but rather against the way it was being implemented without explicit Congressional approval.
President Biden’s ambitious debt relief plan, promising to cancel up to $20,000 in student loan debt per eligible borrower, had been temporarily stalled since October when the 8th U.S. Circuit Court of Appeals imposed a hold. The Supreme Court’s decision puts a final halt to the plan, which was projected to cost over $400 billion and affect nearly all borrowers.
However, the Court’s decision was less about the forgiveness of loans and more about the defense of the constitution’s separation of powers. Throughout history, it has often been seen that the allure of delivering populist promises can be a route for the expansion of government power. This decision is a clear message to the Biden Administration and future presidencies that such overreaching authority will be checked.
The case revolved around Title IV of the Higher Education Act of 1965 and the Higher Education Relief Opportunities for Students (HEROES) Act of 2003. The Education Act allows the Secretary of Education to cancel or reduce loans under specific circumstances, while the HEROES Act allows modifications in relation to national emergencies.
In 2022, the Secretary of Education invoked the HEROES Act, intending to waive or modify student loan repayment obligations due to the economic impacts of the COVID-19 pandemic. The plan was subsequently challenged by six states, arguing it exceeded the Secretary’s statutory authority. This eventually led to the nationwide preliminary injunction by the 8th Circuit.
The Supreme Court’s decision to reverse the Secretary’s plan was based on the conclusion that the HEROES Act does not authorize a sweeping cancellation of $430 billion in student loan principal. The Court found that the Secretary’s debt cancellation plan wasn’t a ‘modification’ but a fundamental change in the scheme designed by Congress. Such a drastic change, they argued, required clear Congressional authorization, which the plan lacked.
Furthermore, the Court was concerned with the “economic and political significance” of the Secretary’s action and its implications on the balance of powers. The decision stressed that the “basic and consequential tradeoffs” inherent in a mass debt cancellation program were decisions that “Congress would likely have intended for itself.”
Delivering the opinion of the Court, Chief Justice John Roberts was joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett. Justice Barrett filed a concurring opinion. A dissenting opinion was filed by Justice Kagan, joined by Justices Sotomayor and Jackson, arguing that the Secretary’s plan was a necessary response to an unprecedented national emergency.
This ruling reaffirms the vital separation of powers in our constitutional republic (or what’s left of it). While it halts the implementation of a broad student loan forgiveness plan, it underlines the necessity of securing clear legislative authorization for such significant policy changes. The decision is not against the idea of loan forgiveness but rather emphasizes the democratic processes that should be employed to effect such significant policy shifts. In effect, this ruling is a validation of checks and balances at the core of our government’s structure, even in times of crisis.
