Supreme Court Strikes Down President Biden’s Plan to Forgive Student Loan Debt

AP Photo/Mariam Zuhaib

In a blow to one of President Joe Biden’s campaign promises, the Supreme Court struck down his student loan forgiveness plan. The ruling will block millions of borrowers from receiving federal debt relief. Biden had proposed canceling student loan debt while running for president in 2020, and he finally announced his forgiveness program in August 2022. Court challenges meant it never took effect.

In a six to three decision along ideological lines, the court ruled the program was an unlawful exercise of presidential power because it had not been approved by Congress.

On Friday’s show, Megyn was joined by Charles C.W. Cooke, senior writer at National Review, to discuss the decision and why it is, in Cooke’s words, “a great day in American history” for the separation of powers.

Biden v. Nebraska

Last summer, the Biden administration released its Student Loan Debt Relief Plan to allow eligible borrowers to cancel up to $20,000 in federal student loan debt. Around 43 million Americans would have been eligible to participate in the program that was estimated to cost more than $400 billion. In October, the Eighth U.S. Circuit Court of Appeals issued a temporary hold blocking the forgiveness from taking effect.

In Biden v. Nebraska six states – including Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina – challenged the lawfulness of the Student Loan Debt Relief Plan. The issues at play included:

  1. Whether six states have Article III standing to challenge the Department of Education’s student-debt relief plan
  2. Whether the plan exceeds the secretary of education’s authority

The Biden administration argued the states lacked Article III standing to bring the case. Article III standing requires the plaintiff to have an injury that is “concrete, particularized, and actual or imminent; fairly traceable to the challenged action and redressable by a favorable ruling.” That is generally taken to mean that a vague, broad injury is not grounds for a federal lawsuit.

Additionally, the Department of Education believed the secretary of education had the power to forgive student loan debt under the 2003 Higher Education Relief Opportunities for Students Act (a.k.a. HEROES Act). The law allows the government to provide student loan relief when there is a “national emergency” to ensure people are not in “a worse position financially” as a result.

The state of Missouri argued it had standing because the reduction in student loans would impact the Higher Education Loan Authority of the State of Missouri (MOHELA), which it considers an extension of the state. Iowa, Kansas, Nebraska, and South Carolina said the cancellation of debt may result in future harm due to decreased tax revenue, while Arkansas and Nebraska claimed the plan would cause financial harm because borrowers would consolidate their loans.

Biden v. Nebraska was one of two cases before the high court on this issue. Department of Education v. Brown presented a similar challenge to the Student Loan Debt Relief Plan, but the court decided the plaintiffs did not have standing to bring the claim.

The Supreme Court Ruling

In the six to three ruling – in which the majority included Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Brett Kavanaugh, Neil Gorsuch, and Amy Coney Barret – the court ruled Missouri had the right to sue and rejected the Biden administration’s claim that the Student Loan Debt Relief Plan was lawful under the HEROES Act. 

Chief Justice Roberts authored the majority opinion and said the language in the HEROES Act was not specific enough because the court’s precedent “requires that Congress speak clearly before a department secretary can unilaterally alter large sections of the American economy.” He went on to write:

″’Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?’ We can’t believe the answer would be yes.”

Justices Elena Kagan, Sonia Sotomayor, and Kentanji Brown Jackson were in the minority, with Justice Kagan penning the dissent. “In every respect, the court today exceeds its proper, limited role in our nation’s governance,” she wrote. “The result here is that the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness.”

President Biden wasted little time speaking out. He called the ruling “unthinkable” in a tweet and vowed that the “fight isn’t over.” It is believed he will announce new actions to protect borrowers later today.

A Victory for the Separation of Powers

While the headlines in this decision may focus on the student loans, Cooke said the crux of the case is about separation of powers and whether or not they stay intact. The ruling ensures they do. “They decided to decide this case on the merits and said Biden went too far,” Megyn noted. “He doesn’t have the power to do this.”

In case you need a brush up on the U.S. Constitution, Cooke explained that it vests all (not some) legislative powers to Congress. “That includes everything to do with the budget – taxes, spending, borrowing, and so forth,” he said. “Anything that the president of the United States does – and his branch is in Article II, not Article I… has to be explicitly authorized by Congress.” The executive branch does not have “any free floating powers when it comes to legislation or budgeting,” he added. 

In the case of student loan forgiveness, everyone from Biden to former Speaker of the House Nancy Pelosi (remember when she infamously confirmed the president “does not” have the authority to forgive debt?) to the Department of Education seemed to know Congress needed to be involved… until it was no longer politically expedient to say so. “It should have been a nine to nothing [decision] if you believe, as I do, that the core of the American Constitution is separation of powers,” Cooke said. “That’s in no way to disparage the rest of it – the Bill of Rights, the reconstruction amendments, and so on – but the core of what separates us from every other country is separation of powers.”

If the Democratic Party would like to ‘forgive’ student loans (which, in Cooke’s view, amounts to “transferring the liability for the loans to the people who didn’t borrow them”), nothing is stopping them from doing so. “If they want to do it, they can introduce the bill into Congress tomorrow, they can convince enough people in there to pass it, and Joe Biden can sign it and then implement it,” he concluded. “Until that has happened, he can’t do it.”

You can check out Megyn’s full analysis of the SCOTUS decision by tuning in to episode 579 on YouTube, Apple Podcasts, or wherever you like to listen. And don’t forget that you can catch The Megyn Kelly Show live on SiriusXM’s Triumph (channel 111) weekdays from 12pm to 2pm ET.