A sharply divided Supreme Court has struck out President Joe Biden’s $400 billion plan to cancel or reduce federal student loan debts for more than 40 million Americans.
The justices were split on the decision 6-3, with the conservative majority saying the president and his secretary of education do not have the authority to unilaterally act without congressional approval.
The majority rejected arguments that a bipartisan 2003 law dealing with national emergencies, known as the HEROES Act, gave Biden the power he claimed.
Twenty-six million people had applied for relief and 43 million would have been eligible, the administration said. The cost was estimated at $400 billion over 30 years.
The forgiveness program would have canceled $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income.
In the ruling, the court held that the administration needed Congress’ endorsement before undertaking so costly a program.
“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.
In a statement, the Legal Aid Society said the Supreme Court’s ruling amounts to “a de facto salary cut” that will hit regular Americans hard, including those who help the less fortunate in other, workaday courtrooms.
Roughly 26 million people had applied for relief under the program, and about 16 million had already been approved by the Department of Education.
The loan plan joins other pandemic-related initiatives that faltered at the Supreme Court.
Meanwhile, interest is expected to begin accruing again in September, and payments will be due beginning in October.