(SACRAMENTO, CA) - Today the Supreme Court of the United States overturned the Biden Administration’s plans to provide up to $20,000 in student loan forgiveness for Pell Grant recipients, and up to $10,000 in debt cancellation for all other qualifying federal student borrowers.

 

Last August, the Biden Administration introduced a plan to provide one-time student debt relief targeted at low- and middle-income families. The plan allows borrowers who were Pell Grant recipients to receive up to $20,000 in federal debt relief, while non-Pell recipients can receive up to $10,000. To be eligible, borrowers must have incomes below $125,000 (or $250,000 for households). As a result of the immense popularity and urgent need for debt relief, more than 26 million Americans applied for the program during
the few weeks while the application was available. In California an estimated 3.5 million borrowers were eligible, of whom 2.3 million applied for debt cancellation, and 1.47 million were approved before litigation was filed disputing the validity of President Biden’s actions, forcing the program to halt, closing the application portal and pausing further application processing.

 

Of several sham lawsuits, two cases made it to the Supreme Court level, Biden v. Nebraska and Department of Education v. Brown. The Nebraska case, brought by several Republican-led states, asserts that the President overstepped his authority under the federal HEROES Act, the authority that the President used to cancel borrowers’ debt in response to the COVID-19 national emergency. The Brown case, brought by two private individuals, argues the Biden administration erred by failing to provide proper public notice and comment periods under the Administrative Procedure Act and Higher Education Act.

 

Today the Supreme Court found in favor of conservative states, formally blocking President Biden’s plan to use emergency powers to cancel up to $20,000 for student loan borrowers in the wake of COVID-19 emergency.

In response, the Campaign for California Borrowers’ Rights coalition issued the following statement:

 

“Today’s ruling is a complete betrayal of the 40 million struggling borrowers and their families–including 3.8 million here in our state of California– that were looking to the Supreme Court to follow the letter of the law and uphold President Biden’s urgently needed student debt relief program. Overturning this relief not only undermines our Democracy and the faith of millions in our government institutions, but also
perpetuates the cycle of economic inequality in our country. Millions of borrowers and their families now face the prospect of economic ruin as the fundamentally broken student loan system is set to resume on September 1st. President Biden must explore every option to deliver debt relief before payments resume and The Campaign for California Borrower’s Rights will not stop advocating until the cancellation of
student debt is made into a reality."

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