GREENSBORO, N.C. — A divided Supreme Court ruled that the Biden administration does not have the authority to cancel or reduce student loans for millions of Americans.
The 6-3 decision, with conservative justices in the majority, struck the $400 billion plan, announced by President Joe Biden last year.
This leaves borrowers set to start repayments that are expected to resume by late summer.
Already, the Supreme Court has made decisions regarding affirmative action, voting rights, and religious rights.
Now, student loan forgiveness joins that list.
The Supreme Court ruled that the HEROES Act does not authorize the relief plan.
Betsy Mayotte, President of the Institute of Student Loan Advisors said the HEROES Act is what President Biden was hanging his legal hat on to get himself the authority to do broad student loan forgiveness
"The HEROES Act contains just a single sentence, but boy is it an important sentence. Essentially what it says, is that in the situation of a national emergency, in which Covid was the President of the United States has the authority to take action that is contrary to federal law,” Mayotte said.
The court said the administration needs Congress' endorsement before allowing the loan forgiveness program. The majority rejected arguments that a bipartisan 2003 law dealing with student loans provided the authority Biden claimed.
Elon University Professor, Anthony Hatcher said this will have a large impact on many people.
“We’ll have to go back to you know rethinking those entire savings plans, rethinking their plans to perhaps buy a house, or move or to rent a car, or you know many students go back and live with family after graduation and those plans may have to be extended for a while,” Hatcher said.
Biden pushed for eligible borrowers to have up to 20,000 of their student debt canceled, 10,000 erased for most making less than 125,000 a year, and households earning less than 250,000.
He also proposed the cancellation of an additional 10,000 for pell grant recipients.
The program, if it wasn’t struck down, would’ve cost the country more than 400 billion dollars.
Senator Thom Tillis tweeted after the decision came down saying:
I’m glad to see that President Biden’s politically-motivated student loan plan, which unfairly forced millions of hardworking Americans to pay off the debt of others, was ruled unconstitutional.
Student Loan Repayment is set to begin again at the end of August after the covid pause.
The first payment will not be due until October.
It's not immediately clear whether the White House has a backup plan to try again to implement widespread student loan relief.
In a speech Friday, President Joe Biden pledged an alternative student debt relief plan.
He said the next steps include a new path toward providing student debt relief, one he hopes will rely on a different law, the so-called Higher Education Act of 1965.
MORE WAYS TO GET WFMY NEWS 2
Subscribe to our daily newsletter Let’s Get 2 It!
Download the WFMY News 2 APP from your Apple or Google Play store.
ADD THE WFMY+ APP TO YOUR STREAMING DEVICE
ROKU: Add the channel from the ROKU store or by searching for WFMY.
Amazon Fire TV: Search for WFMY to find the free app to add to your account. You can also add the app directly to your Fire TV through your Amazon account.