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Millions of Texans still on the hook for student loans after Supreme Court decision

President Joe Biden (left) speaks about student loan debt forgiveness at the White House on Aug. 24 with Education Secretary Miguel Cardona.
Evan Vucci/AP
President Joe Biden (left) speaks about student loan debt forgiveness at the White House on Aug. 24 with Education Secretary Miguel Cardona.

The United States Supreme Court on Friday shot down President Biden’s attempt to provide millions of borrowers with student-loan debt relief.

The 6 to 3 decision comes after the administration in August sought to provide up to $10,000 in loan relief to borrowers who make $125,000 or less annually, or up to $20,000 for Pell Grant recipients.

The White House initially stated the benefit would have affected more than 3.3 million Texas borrowers who were eligible for the loan relief, and 2.3 million who received Pell Grants, according to a White House fact sheet. But in an updated post earlier this year, the White House put the number of Texans who would applied or would have been automatically eligible for relief at more than 2.1 million after “elected officials and special interests” blocked some of the relief.

The Biden administration argued that under the Higher Education Relief Opportunities for Students, or HEROES, Act of 2003, the administration had the authority to cancel the debt. That’s because the act “authorizes the Secretary to “waive or modify any statutory or regulatory provision” applicable to the federal student loan program. The administration said the COVID-19 pandemic’s effects on the economy justified the debt-forgiveness plan.

But a majority of the justices said instead that the U.S. Secretary of Education doesn’t have the authority to rewrite the statute.

“The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not,” the opinion, written by Chief Justice John Robert, states. “We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”

Instead, Roberts said, that duty belongs to the U.S. Congress.

“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,” he wrote.

The lawsuit was brought by Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.

Also on Friday, the country’s high court rejected a separate lawsuit that originated out of Texas after two borrowers who would not have qualified for forgiveness argued the administration did not follow proper rulemaking policies when it was implemented. But in a unanimous decision the Supreme Court held that the plaintiffs did not have standing, or the legal right to sue.

The debt-relief program would have cost about $400 billion, leading several Republicans to decry the burden the cancelation would have placed on taxpayers, including those who never attended college.

In late 2022, Texas Gov. Greg Abbott joined nearly two dozen Republican governors in sending a letter to the Biden administration admonishing the president for the effort, arguing that the debt cancelation will ”force American taxpayers to pay off the student loan debt of an elite few.”

The Republican governors also stated that former U.S. House Speaker Nancy Pelosi previously said that the president doesn’t have the power to cancel debt on his own, which Roberts also noted in the opinion.

“As then-Speaker of the House Nancy Pelosi explained: “People think that the President of the United States has the power for debt forgiveness. He does not,’” he quoted.

Texas Democrats were quick to slam the decision. U.S. Rep. Veronica Escobar, D-El Paso, said the decision is in line with the extreme decisions it issued this term on affirmative action, abortion and LGBTQ rights.

“Now, the very justices taking luxury trips funded by billionaires have decided college should remain a debt sentence for millions of Americans,” she tweeted, making a reference to recent reports about some of the justices’ relationships with wealthy donors who have business before the court.

This story has been updated with reactions to the decision and updated figures on how many Texans would have been eligible for the debt relief.

Copyright 2023 KERA. To see more, visit KERA.

Julián Aguilar