It might seem cruel to say, but the Supreme Court was right in striking down President Biden’s $450 billion student loan forgiveness plan. Yes, hundreds of thousands of students who thought the burden of their student loans had been lifted were greeted last Friday with the news that the SOBs on the Supreme Court—the same ones who overturned Roe v. Wade—have condemned them to a life of servitude which, many of them believe, is inherent in borrowing money to go to college.
Most of us are sympathetic to the student loan borrowers. I did not enjoy borrowing money for college but had no choice. It was either borrow or not go to law school. I also found that my student loan repayments, small when compared with what recent generations of student debtors owe, were a hindrance. Buying a new car was out of the question. Taking on more debt, even after I secured a good paying job made possible by the education I financed, seemed reckless. So, I did not do it. I even worried about being able to repay the loan if I found myself unemployed, so I paid more than the required monthly repayment amount. I printed out a loan amortization table and calculated how I could avoid future loan repayments by making prepayments.
When President Biden announced his student loan forgiveness plan, I was (correctly) not included. The idea of repaying student loan borrowers for payments made many years previously is ridiculous. Reimbursing borrowers who paid back their student loans is, however, somehow fair. Had I not had to repay my student loans, I could have saved more, and would have a lot more money today. Or perhaps I could have visited St. Petersburg and visited the Hermitage before Putin effectively closed Russia to sane Americans. You get the idea, but, fortunately, President Biden drew a line. The loan forgiveness program could have cost more than a trillion dollars if taken to its logical extreme.
President Biden was right to not include me in his student loan plan. And, but for the lack of authority to forgive part or all loans of 43 million borrowers, was right to seek loan forgiveness for student loan borrowers struggling with student loan debt. The problem, identified by the conservative majority on the Court in striking down Biden’s action, is that the law on which Biden premised his loan forgiveness plan did not allow it.
The Court majority analyzes the 2003 HEROES Act, which grants the president authority to waive or modify student loan repayment terms to respond to hardships caused by national emergencies, and concludes that it is inconceivable that Congress intended the wholesale forgiveness of $450 billion in student loans with no analysis of whether the individual borrowers identified for forgiveness needed the help. The Court’s dissenters, three liberal Justices, argued that there is no explicit limitation on the right of the president to “waive or modify” and that a waiver can be as broad as the president would like.
Following the logic of dissenters, President Biden could have forgiven every penny of student loan debt. If a child of Elon Musk, for now the world’s richest oligarch, had a student loan, the Justices could have argued, President Biden could have freed him of the nuisance of having to repay the loan.
President Biden responded to the Court’s decision by condemning it. He vows to find another way to deliver on his promise of debt forgiveness. Will Biden be able to do something? Yes. The Court’s decision recognizes the power of the president to “waive or modify.” Biden will be able to provide better-targeted loan relief to millions of borrowers.
All of us should be glad that President Biden cares so much about student loan debtors. Even though the concept of forgiving student loan debt is highly political, the reality of out-of-control student debt is real for millions of borrowers.
President Biden has executive authority to provide targeted student loan debt relief, but he needs to part company with Senator Elizabeth Warren (D-MA), the politician responsible for pushing Biden to exceed his executive authority by basing $450 billion of federal spending on what she saw as a loophole in a statute.
Congress is highly unlikely to simply go back and amend the HEROES Act with language like, “The President can declare anything he wants to be an emergency and forgive any federal debt owed by anyone, regardless of the federal costs involved or whether the forgiveness is fair or needed.” Such a “solution” would be easy. It would also be monumentally unfair, illegal, fiscally reckless, and stupid.
The brouhaha resulting from the Court striking down the Biden plan should prompt Congress and the public to take an in-depth look at the cost of higher education and the issue of how students and their families finance it. At the top of the list is addressing the problem of college costing too much. Congress must figure out a way to make college affordable without massive student loan debt. The best student loan is the one never made.
Congress also needs to face up to the reality that if you forgive current student loan borrowers’ debt, you are creating a precedent for future generations to ask for the same thing. It may be time to abolish student loans altogether and for Congress to figure out a way to make college free for most Americans. Possible? Yes. Extremely difficult? Absolutely.
The full text, including the dissenting opinion, of Biden v. Nebraska may be found here.
J.E. Dean is a retired attorney and public affairs consultant writing on politics, government, and other subjects. He is a former counsel to the Committee on Education and Labor of the U.S. House of Representatives where he worked on student loan and other higher education legislation.