WASHINGTON -- The U.S. Supreme Court on Friday struck down President Joe Biden’s student loan forgiveness program, as a Missouri-created student loan agency helped six conservative-led states dash the hopes of millions of Americans hoping to be relieved of up to $20,000 of their debt.
In an 6-3 opinion, Chief Justice John Roberts wrote that the Biden administration had gone too far in relieving up to 40 million Americans of some or all of their student loans, saying the plan went beyond the power Congress granted the Department of Education under a 9/11-era law that gave the administration the ability to make changes to the student loan program in emergencies.
“Today, we have concluded that an instrumentality created by Missouri, governed by Missouri, and answerable to Missouri is indeed part of Missouri; that the words “waive or modify” do not mean “completely rewrite”;” and that our precedent – old and new – requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy,” Roberts wrote.
The case was brought by six states, including Kansas and Missouri, which claimed that the Biden administration had overstepped its authority when it used a law originally intended for military families to forgive up to $10,000 in student loan debt and up to $20,000 in debt for Pell Grant recipients. Pell Grants are reserved for people from low-income families.
More than 16 million Americans, including 305,000 Missourians and 143,000 Kansans had already been approved for loan forgiveness. When the Biden administration introduced the program, it was during a state of emergency for the COVID-19 pandemic.
In order to prove they had the right to sue, the states focused on Missouri’s state-affiliated student loan program, called the Missouri Higher Education Loan Authority, but better known as MOHELA.
MOHELA was created by the Missouri legislature in 1981, but operates as an independent entity. Missouri law says the legislature can’t be held liable for decisions made by the student loan servicer, but also uses money from MOHELA to fund scholarship programs in-state.
Lawyers for the states argued that Missouri was directly harmed by the Biden administration’s student loan forgiveness because it would potentially cut the agency’s operating revenue by around 40%, jeopardizing the funding for those scholarships.
The Biden administration argued that because it has the independent right to sue, Missouri can’t sue on its behalf. The conservative justices on the court disagreed.
“The Secretary’s plan harms MOHELA in the performance of its public function and so directly harms the State that created and controls MOHELA,” Roberts wrote. “Missouri thus has suffered an injury in fact sufficient to give it standing to challenge the Secretary’s plan.”
Increasingly, both Republican and Democratic state attorneys general have used their office to build political capital by suing a president of the opposing political party. Sen. Eric Schmitt, who was attorney general when Missouri joined the student loan case, often talked about his lawsuits against the Biden administration during his successful U.S. Senate campaign.
Schmitt immediately took credit on Twitter, writing that Biden’s loan forgiveness program was a scam.
“I’m proud to have brought this case as Missouri’s Attorney General and save taxpayers a half trillion dollars,” Schmitt wrote.
In determining that Missouri was harmed by the loan program, the six conservative justices then decided Congress had not given the Biden administration the express authority to forgive student debt when it passed a law called the HEROES Act in 2003, which gave the Department of Education the power to relieve hardship people may have from student loans in emergency situations.
The ruling puts an already unpopular court on the side of eliminating a program that would have helped millions of Americans financially. Groups in favor of eliminating student loan debt rallied outside of the court in February, on the day oral arguments were heard.
In the dissent, Justice Elena Kagan wrote that the court had overstepped because the HEROES Act made it clear that the Department of Education could modify the loans program.
“The result here is that the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness,” Kagan wrote. “Congress authorized the forgiveness plan (among many other actions); the 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 the plan provides, because (so says the Court) that assistance is too ‘significan[t].’”
Roberts chided the liberal justices for indicating the court went beyond its authority, saying it has become common for people to claim the court overstepped when they disagree with an opinion.
“We do not mistake this plainly heartfelt disagreement for disparagement,” Roberts said. “It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country.”
Any future attempt at loan forgiveness will now have to go through a divided Congress, with a Republican House majority unlikely to help Biden achieve a political victory ahead of his 2024 reelection campaign.
