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approximately 1.4 million Texans Students set to have the federal government cancel some or all of their student loans must continue paying their loan balances after the US Supreme Court ruled on Friday that the Biden administration’s student loan forgiveness plan is unconstitutional.
The court handed down opinions in two cases challenging President Joe Biden’s authority to issue his loan forgiveness plan under the Higher Education Relief Opportunity Act for Students. In a 6-3 decision, the court ruled in favor of six GOP-led states that alleged Biden violated his authority as president with his loan forgiveness plan.
The court unanimously ruled that two Texas students, who said the federal government had not provided them with a public comment period to voice their dissent, had no standing to sue, and dismissed their case. Gave.
In Biden v. Nebraska, the court ruled that Biden did not have authority to issue an amnesty plan under the Heroes Act, a federal law passed in the wake of the September 11, 2001 terrorist attacks that allows the Secretary of Education to be replaced by the attack. Student loan program for those affected. In 2003, Congress expanded the law to allow the federal government to provide loan relief to students affected by war or a national emergency.
When Biden released his plan last August, he said he had the power to provide student loan relief to students affected by the COVID-19 pandemic, a national emergency.
“The HEROES Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial aid programs under the Education Act, but allows the Secretary to reauthorize that legislation to the extent of canceling $430 billion of student loan principal. writes Chief Justice John Roberts in the majority opinion.
The decision means all students with loans must resume repaying their loans in October.
It is a major setback for Biden, who promised during his presidential campaign that he would address student debt if elected.
On Friday afternoon, Biden announced that the administration has begun a new regulatory process for providing student loan relief under the Higher Education Act, which allows Education Secretary Miguel Cardona to “compromise, forgive or release loans under certain circumstances.” Will give the ability to , adding that it is a lengthy process that allows for public comment.
Biden also announced a 12-month “on-ramp” repayment plan where lenders will not refer borrowers who miss payments to credit agencies, allowing them to avoid defaulting on their loans, which can have long-term effects on one’s credit score. There may be an effect. ,
Former President Donald Trump initially froze student loan payments at the start of the COVID-19 pandemic, and Trump and Biden have since extended the moratorium nine times. But earlier this month, the federal government announced that interest would start accruing again in September, with payments resuming in October.
Under Biden’s plan, $20,000 of student loan debt would be erased when individuals earning $125,000 or less annually receive federal Pell grants to help pay for college. For those who took out loans but didn’t qualify for those federal grants, $10,000 will be removed from their student loan debt. The loan forgiveness program, which applies to borrowers regardless of where they earned a degree, was put on hold in November as the cases reached the courts.
In a dissenting opinion, Justice Elena Kagan wrote that the court’s decision overruled the authority granted by Congress to the US Secretary of Education under the Heroes Act.
They wrote, “In establishing the loan forgiveness plan, the current Secretary eliminated pre-existing conditions for loan forgiveness, and specified various conditions, thereby opening up loan forgiveness to more borrowers.” “It may have been a good idea, or it may have been a bad idea. Anyhow, the secretary did what the Congress told him he could do.
Data from the Office of Federal Student Aid shows that as of March, Texas has 3.8 million residents with a total of $127.3 billion in student debt. Texas is second only to California in the number of delinquents and loans, with nearly 4 million students owing $149.7 billion.
According to the Texas Higher Education Coordinating Board, in 2021, 56% of students graduating from four-year public universities in Texas had approximately $25,000 in student debt. Biden’s decision to waive more money for low-income students who qualify for federal Pell grants would have particularly affected low-income borrowers and people of color, who are more likely to qualify for federal financial aid and Higher amounts are more likely to incur student loan debt.
In a statement, the Texas chapter of Democrats for Education Reform criticized the court’s back-to-back decisions to strike down the loan forgiveness plan and Thursday’s decision to end the use of race in college admissions.
While first-generation college students, students from low-income families, and students of color begin to pay attention to one Supreme Court ruling after another designed to undermine their ability to access the transformative power of higher education , advocates and policy makers must redouble our efforts. Create effective and affordable pathways to higher education and career training for all students, said Gary Jones, the group’s executive director.
Meanwhile, more right-wing groups praised the decision as a victory for “separation of powers and the rule of law”.
The Court correctly held that while Congress gave the executive branch the power to “omit or modify” certain provisions of the law, it did not give it the power to make basic and fundamental changes that would alter federal student-loan policy,” said . thomas berry, a research fellow at the Cato Institute, a libertarian think tank. “The Framers designed our system so that such fundamental questions could be debated and decided in Congress, and that is where such decisions should be made.”
The Supreme Court earlier this year heard two cases challenging Biden’s plan. One was filed by six GOP-led states, which did not include Texas. In that lawsuit, the states argued that Biden used the pandemic as an excuse to fulfill a campaign promise, exceeding his authority as president. During oral arguments, the federal government argued that the states did not have the capacity to argue their case.
In his opinion Friday, Roberts said Missouri, one of the suing states, had standing because the forgiveness plan would have cost a nonprofit student loan servicer set up by the state $44 million annually in fees.
Roberts wrote, “(W)here a state has been harmed in carrying out its responsibilities, the fact that it has decided to exercise its authority through a public corporation it has created and that the state does not bar you from suing to recover damages.”
The second lawsuit was filed by the Job Creators Network Foundation on behalf of two Texas students who argued that the program was illegal because it did not allow for a public comment period. In November, a federal judge in Texas agreed with the plaintiffs and struck down the plan. The Justice Department has argued that it is not required to solicit public comment.
The Job Creators Network Foundation is a conservative advocacy group run by Home Depot co-founder Bernie Marcus. In the lawsuit, those borrowers alleged that they were not given an opportunity to express their disagreement with the program’s eligibility criteria.
Alexander Taylor, one of the plaintiffs who graduated from the University of Texas at Dallas, is not eligible for the $20,000 waiver because he did not receive a Pell Grant, which is available only to low-income students, and therefore would have been entitled to it. $10,000 off her student loans.
The other plaintiff, Myra Brown, has privately held debts that are no longer included in Biden’s plan. Earlier in the program’s existence, commercially placed loans such as Brown’s could be consolidated into loans borrowed directly from the federal government rather than from a lender that met the eligibility requirements of Biden’s program, but the Department of Education This policy was changed after several lawsuits were filed from conservative states. ,
Brown graduated from the University of Texas at El Paso and the Cox School of Business at Southern Methodist University in Dallas.
Student loan forgiveness has long been a major policy objective among Democrats. Its proponents say that student debt is preventing graduates from economic mobility and discouraging potential students from pursuing the level of education that could improve their financial prospects.
But Republicans have argued that loan forgiveness is unfair to students who have repaid their loans and could pump more cash into the economy and lead to inflation. They also oppose using tax dollars from Americans who never went to college to help those Americans. Texas Gov. Greg Abbott wrote in a letter in September that student loan forgiveness would hurt the working class.
In a statement, U.S. Representative Lloyd Doggett, representing Austin, said the decision adds more urgency to national efforts to make higher education more affordable for students and families.
“The burden of debt is ruining the future of those trying to buy a home, start a family or save for retirement,” he said, “as they continue to recover from the pandemic.”
Disclosure: Southern Methodist University, The University of Texas at Dallas and The University of Texas at El Paso have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization funded by donations from members, foundations, and corporate sponsors. is nurtured. Financial backers play no role in Tribune’s journalism. Find their full list here.
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A previous version of this story misspelled the name of a Supreme Court justice. Her name is Elena Cagan, not Elena Cagan.