The Supreme Court on Friday struck down President Joe Biden’s student loan forgiveness plan, denying tens of millions of Americans the chance to get up to $20,000 of their debt erased.
The ruling, which matched expert predictions given the justices’ conservative majority, is a massive blow to borrowers who were promised loan forgiveness by the Biden administration last summer. Financial experts also expressed concern about what could come next for borrowers.
The U.S. Department of Education recently warned that pushing people into repayment after an over three-year-long pause and a pandemic that disrupted the financial security of many households without Biden’s loan cancellation could trigger a historic rise in delinquencies and defaults.
Consumer advocates slammed the ruling, and accused the court of bias.
“Today’s decision is an absolute betrayal to 40 million student loan borrowers counting on an impartial court to decide their financial future based upon the established rule of law,” said Persis Yu, deputy executive director at the Student Borrower Protection Center, an advocacy group.
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Yet the decision is a major win for the plaintiffs who’d worked to block the forgiveness and were worried about the executive branch interfering in the lending sector. At an estimated cost of $400 billion, Biden’s policy would have been among the most expensive executive actions in U.S. history.
The justices heard oral arguments at the end of February.
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