The U.S. Supreme Court has ruled that the secretary of education lacks the authority to establish a student loan forgiveness program that would cancel approximately $430 billion in debt principal and impact most borrowers. The Court held that the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act), which allows the secretary to waive or modify provisions in connection with a national emergency, does not authorize such extensive loan cancellation.
"Biden's student loan debt amnesty is dead!" Lindsey Burke, The Heritage Foundation's director of the Center for Education Policy and Mark A. Kolokotrones Fellow in Education, said in a recent tweet. "SCOTUS holds 6-3 that transferring half a trillion dollars from borrowers to all taxpayers is not authorized in HEROES. Huge win for taxpayers and future students!"
The case was argued on Feb. 28 and decided on June 30, a Supreme Court syllabus of the case said. The issue presented was whether the secretary of education has the authority under the HEROES Act to establish a student loan forgiveness program that would cancel approximately $430 billion in debt principal and affect nearly all borrowers. The HEROES Act allows the secretary to waive or modify statutory or regulatory provisions applicable to student financial assistance programs under Title IV of the Education Act in connection with a war, military operation or national emergency. But the scope and extent of the secretary's authority to modify or waive provisions are limited.
In 2022, the secretary invoked the HEROES Act to issue waivers and modifications, reducing or eliminating federal student debt for most borrowers. The program offered loan balance discharge for eligible borrowers based on income and prior receipt of Pell Grants.
Several states challenged the secretary's program, arguing that it exceeded the secretary's statutory authority, the syllabus said. The Supreme Court held that the secretary's comprehensive debt cancellation plan went beyond the authority granted by the HEROES Act. The Court emphasized that the Act allows the secretary to modify existing provisions in a modest or minor fashion but does not permit fundamental changes or the introduction of a whole new regime. The Court also concluded that the secretary's program lacked clear congressional authorization and raised separation-of-powers concerns. The Court therefore reversed and remanded the case.
"If we want to help students deal with the increasing cost of getting a degree, giving a bailout to the very colleges and universities that hike prices is not the answer," Burke and Heritage legal fellow Jack Fitzhenry said in a recent press release. "Breaking up the monopoly of college accreditors and offering students more higher education options, while simultaneously cutting off the open spigot of federal higher education subsidies, is a start. Ultimately, students should be equipped with the knowledge and certainty that the student loans they take out can be repaid in future employment."
