#1 Student loan decision: Taxpayers briefly exhale with relief and freedom

Student loan decision: Taxpayers breathe a sigh of relief In a historic ruling, the Supreme Court has delivered a significant victory for American taxpayers by blocking the cancellation of federal student loans under the Higher Education Relief Opportunities for Students Act of 2003, commonly known as the “HEROES Act.” This decision, which prevented President Joe Biden and Secretary of Education Miguel Cardona from implementing their loan cancellation plan, safeguards over half a trillion dollars. Let’s delve into the details and implications of this groundbreaking verdict.

Introduction: Student loan decision

The Supreme Court’s recent ruling has implications that extend far beyond the immediate case. The decision serves as a safeguard against the misuse of executive authority and preserves the power of Congress to write and amend laws. Let’s explore the key aspects of this landmark verdict.

The Court’s Assessment of Standing to Sue

In the case of Department of Education v. Brown, the court unanimously determined that the borrowers lacked standing to sue. The court concluded that the borrowers couldn’t establish a direct link between their failure to receive debt relief and the secretary’s decision to proceed under the HEROES Act.

Biden v. Nebraska: Granting Standing to Challenge the President’s Authority

However, in Biden v. Nebraska, a coalition of six states successfully challenged President Biden’s authority. The court held that Missouri would suffer a direct financial injury due to the cancellation plan, thereby granting the state standing to challenge the president’s actions.

The Merits of the Case: Chief Justice John Roberts’ Majority Opinion

Chief Justice John Roberts, writing for the majority, rejected the government’s argument that the HEROES Act, combined with the COVID-19 pandemic, granted the executive branch the authority to cancel millions of student loans without congressional approval. Roberts emphasized that the authority to “waive or modify” parts of the Higher Education Act did not extend to a complete overhaul of the statute. He contended that Biden and Cardona had exceeded their powers by creating a new loan forgiveness program that deviated from the existing provisions.

Roberts acknowledged the significant economic and political implications of student debt cancellation, recognizing that Congress has been actively engaged with the issue but has yet to provide a legislative response. The court reaffirmed that it is the role of Congress, not the executive branch, to formulate and revise laws.

The Limitations of Executive Authority: student loan decision

Biden’s proposed student loan scheme aimed to cancel up to $20,000 in student loans per eligible borrower, with married households earning up to $250,000 potentially receiving up to $40,000 in debt amnesty as a couple. The court’s decision prevented what would have amounted to a significant financial burden on taxpayers. The scheme was criticized for its excessive generosity and potential inflationary effects on tuition.

Student loan decision: An End to Loan Repayments and Debt Ceiling Extension

In addition to blocking the loan cancellation plan, the court’s decision also brings relief to taxpayers. The pause on loan repayments, which has been costing taxpayers $5 billion per month since March 2020, is set to end by late August. Furthermore, the debt ceiling deal, despite its shortcomings, prevents Biden from unilaterally extending the repayment pause without congressional approval.

Preventing Inflationary Pressures on Tuition

The court’s ruling not only protected taxpayers but also prevented the anticipated inflationary pressures on tuition. The prospect of student loan “forgiveness” would have likely fueled an increase in tuition and fees, with universities expecting ongoing cancellations and subsidies. By declaring such extensive decision-making powers as forbidden under emergency measures, the court ensures that this avenue is no longer available.

The Ongoing Pursuit of Debt Amnesty: A “Plan B”

While the court deliberated on student loan cancellation, the administration concurrently pursued an alternative plan for debt amnesty, known as “Plan B.” This plan, which remains active, focuses on proposed changes to Income-Driven Repayment (IDR).

Proposed Changes to Income-Driven Repayment (IDR)

The proposed rule for IDR would cap qualified borrowers’ monthly loan payments at 5% of their discretionary income, down from the current 10%. It would also increase the income exempt from calculation by determining “discretionary” income from 150% to 225% of the federal poverty line. Most significantly, the rule aims to reduce the time required for loan “forgiveness” from 20 years to just 10.

The Impact on Different Majors and Graduates

These changes to IDR would have varying impacts on different majors and graduates. Low-return majors, such as sociology, would benefit from significant debt forgiveness, while high-return majors like engineering would need to repay their loans in full. Consequently, a substantial percentage of graduates entering the IDR program would potentially never make a single payment before their loans are canceled.

Congress’s Intervention to Claw Back the Proposed Rule

Recognizing the potential financial implications, Congress used the Congressional Review Act to reclaim the proposed rule. However, it is expected that President Biden will veto the resolution, indicating the administration’s determination to pursue this avenue of debt amnesty.

Taxpayers and Future Borrowers: Breathing a Sigh of Relief

Thanks to the Supreme Court’s decision, an expensive, regressive, and inflationary disaster has been averted. Taxpayers and future borrowers can now find some respite from the potential consequences of the loan cancellation plan. However, the battle continues as the administration explores alternative avenues to provide debt amnesty to its favored groups.

The Administration’s Search for Alternative Avenues of Debt Amnesty

Although the court’s verdict halted the immediate student loan cancellation plan, the administration remains determined to explore every possible authority to provide debt amnesty. This ongoing pursuit underscores the need for continued vigilance and engagement from Congress to prevent the transformation of higher education into an entitlement program.

Taxpayers breathe a sigh of relief: temporarily after student loan decision News


The Supreme Court’s decision is a resounding affirmation of the importance of separation of powers and the role of Congress in shaping legislation. By blocking the loan cancellation plan, the court protected American taxpayers from a significant financial burden. While this victory is notable, it is crucial to remain attentive to the administration’s pursuit of alternative avenues for debt amnesty.


Will the Supreme Court’s decision result in increased student loan repayments?

No, the court’s decision does not directly impact existing loan repayment obligations. However, it does prevent the cancellation of federal student loans under the HEROES Act.

How will the Supreme Court’s ruling affect future loan cancellation plans?

The court’s ruling reaffirms that Congress, rather than the executive branch, holds the power to create and amend laws. Future loan cancellation plans would require legislative action and cannot be implemented solely through executive authority.

Are there any alternative avenues for debt amnesty being pursued by the administration?

Yes, the administration has been exploring changes to the Income-Driven Repayment (IDR) plan, which could potentially provide significant debt forgiveness for certain majors and graduates.

What are the potential consequences of widespread student loan cancellation?

Widespread student loan cancellation could have inflationary effects on tuition and create a moral hazard, encouraging future generations to take on excessive debt with the expectation of eventual forgiveness.

How can Congress continue to safeguard against executive overreach in the realm of student loan policy?

Congress must remain vigilant and assert its legislative authority to ensure that any significant changes to student loan policy are deliberated and enacted through proper legislative processes, maintaining a balance between providing relief and fiscal responsibility.

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