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Supreme Court Strikes Down Student Loan Relief -- Here's Who's Most Affected

In a largely anticipated decision, the Supreme Court on Friday ruled in two separate cases that the Biden administration exceeded its authority with its $400 billion student loan forgiveness plan. The court ruled 6-3 along ideological lines.

The first case, Department of Education v. Brown, was brought by two student loan borrowers who didn't qualify for relief sued to vacate the program on the basis that Biden's invocation of the post-9/11 HEROES Act constitutes executive overreach. The Court ruled unanimously that the borrowers did not have standing to sue - but that the Biden administration also doesn't have the authority to forgive the debt.

"The HEROES Act allows the Secretary to 'waive or modify' existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, but does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal," reads the opinion.

Proponents of cancellation have warned of dire consequences, such as Persis Yu - deputy executive director of the Student Borrower Protection Center.

"If payments are to resume without cancelation, we can expect a tremendous increase in defaults and forbearance," said Yu, adding "There absolutely must be a plan to avoid the economic devastation."

Writing the dissent was Justice Elena Kagan, who said the court was making national policy in place of Congress and the executive branch.

"Congress authorized the forgiveness plan (among many other actions); the Secretary put it in place; and the President would have been accountable for its success or failure," she wrote. "But this Court today decides that some 40 million Americans will not receive the benefits the plan provides, because (so says the Court) that assistance is too ‘significant.’"

The challenge to the student loan program was brought by Republican-led states in one case, and two individuals from Texas in another. In both cases, the Justice Department questioned whether the plaintiffs had legal standing to file their suits.

To qualify to challenge the loan-forgiveness effort, the plaintiffs must show they have suffered a specific, rather than generalized, injury that can be remedied by relief from a federal court. It is not enough just to object to the size of the program or even to allege that the president has exceeded his authority.

A panel of the U.S. Court of Appeals for the 8th Circuit gave the states a toehold to continue their litigation, finding that the Missouri Higher Education Loan Authority, a quasi-independent entity, could suffer losses from the program change that would hurt Missouri, one of the challenger states. A different court said the two borrowers, Myra Brown and Alexander Taylor, have standing to proceed because Taylor doesn’t qualify for $20,000 of forgiveness, while Brown is ineligible altogether. -WaPo


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