Tens of millions of students have incurred debt in order to pay for tuition, fees, and other school-related expenses. Exactly how to pay it back has been a trillion-dollar question for those student loan borrowers, and many had hoped that the student loan cancellation plan that President Joe Biden announced in August 2022 would provide much-needed relief to get their finances on a better footing.
For now, though, those hopes have seen a huge setback, as the Supreme Court blocked the Biden student loan cancellation plan in a 6-3 ruling. As expected, a majority of justices found that there was sufficient standing for state governments to bring suit against the Department of Education and challenge the plan. The majority also believed that the statutory authority that the Biden administration claimed as the basis for its action was inadequate, instead asserting that Congress would have anticipated holding onto its authority to approve such a large program itself. However, the three dissenting justices disagreed, questioning the majority's interpretation of statutory authority as well as the plaintiffs' ability to challenge the plan.
It won't make student loan borrowers feel any better, but there was one aspect on which all nine Supreme Court justices agreed. That was in a second case involving student loans, where the Supreme Court ruled unanimously to vacate the lower-court ruling.
Image source: Getty Images.
A rare case of unanimity
With a politically contentious Supreme Court, it's been rare to have undisputed decisions. But the 9-0 decision against a pair of Texas students showed that there are at least some areas on which the entire Supreme Court can agree.
The two plaintiffs in the Texas case were student loan borrowers who attacked the Biden plan from a different angle. One of the borrowers had private student loans rather than federal loans and therefore wouldn't have gotten any loan forgiveness under the plan. The other would likely have met the standards to receive $10,000 in loan forgiveness, but challenged the idea that those who had received Pell Grants would get an even larger $20,000 cancellation amount. The primary argument from the federal government was that the students didn't have standing to challenge the Biden plan.
The opinion , written by Justice Samuel Alito, asserted the long-held rules that courts across the U.S. have followed governing standing to bring cases. It noted that the procedural rights that the plaintiffs claimed had been taken away from them failed to rise to a level meriting blocking the program. In the Supreme Court's view, any arguments about what might happen in the future to their rights as a result of the Biden plan were purely speculative in nature. As a result, the Supreme Court vacated the judgment of the Texas district court and remanded the case to the lower court with the instruction to dismiss the case.
What could lie ahead
Of course, despite technically losing the case, the two plaintiffs got their way in the end, as the other case against the Biden plan successfully blocked it from taking effect. In combination with the coming end to the pause on repaying student loans, these two borrowers no longer have to worry that they're missing out on something other student loan borrowers are getting.
Yet as speculation turns to how the Biden administration might respond, many believe that the Department of Education might well try to take similar action using different statutory authority. If that happens, then you can count on opponents once again turning to the courts for relief. Because of the Supreme Court's decision against these two individual student loans borrowers, however, it'll be tough for them or any other individuals to make a credible case to challenge the Biden administration in that event.
