America's Talking - Supreme Court Strikes Down Biden’s Student Loan Cancellation

Episode Date: July 9, 2023

Cancelling hundreds of billions of dollars in student loan debt cannot be done by President Joe Biden and his administration, the U.S. Supreme Court ruled Friday. In a 6-3 opinion, the court said Biden’s administration did not have the authority to unilaterally cancel student loan debt, blocking the president’s plan to cancel $10,000 per borrower. Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson dissented in the case known as Biden v. Nebraska. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Greetings and welcome to American Focus, powered by the Center Square. I am Dan McAulib, executive editor of the Center Square Newswire Service. Joining me again today, as he does every week, is the Center Square's Washington, D.C. Bureau Chief Casey, Casey, we are recording this on Friday, July 7th. A week ago, Casey, you reported on a major U.S. Supreme Court decision striking down President Joe Biden's student loan relief program, saying it, It was not within the president's authority to forgive up to $10,000 in student loan debt of American borrowers. Tell us more about this. What was the reasoning behind this ruling and what does it mean? That's right. So this was a 6-3 ruling against a Biden administration kind of fiat.

And that was part of the problem. Biden announced, as you said, last year, that student borrowers could have forgiven $10,000 of their federal debt for student loans and Pell Grant recipients could get up to $20. thousand forgiven. He also delayed repayment. You know, now Trump had also delayed repayment because of COVID. And so actually, those with student loans have not began repaying for several years now. So this court also, if you're listening and you haven't been paying your student loans for a few years, you have to start repaying them here later this year now. The Department of Education will start rolling that out soon in a few months. But the case in question is Biden v. Nebraska. Justice is Elena Kagan, Sonia Sotomayor and Katanji Brown Jackson dissented in the case.

They backed up Biden's student loan forgiveness. They're the courts, three liberal justices. That's right. The six who voted to strike it down are at least more conservative. Some are more conservative than others, but they're center to center right. Yeah, I mean, John Roberts is pretty moderate nowadays. He's, I mean, he has not, quote, unquote, come through for Republicans on some pretty big cases, like, you know, like Obamacare, different. thing. So, or, you know, the, I guess, gay marriage ruling back, you know, a couple of while back now.

But so he's one of the more moderate justices, but you're right. This was definitely a more partisan split. And the question here was around the Heroes Act. So the Heroes Act was a law passed by Congress that allowed the administration, the federal government to have a little bit of leeway in forgiving or delaying repayment for service members so that, you know, who are having issues paying their loans. It was like, hey, let's help veterans out, you know, a little bit on the side, their loans. And so, you know, it sounds like a good enough idea. It was passed in 2003. But Biden took that bill or that law in question and expanded it and took the provision in it and said, actually, I'm going to use the authority of this act to forgive unilaterally all these Americans

debt, right? And so there was really two questions in the case. One, did the state of Missouri have grounds to sue the Biden administration? Because they really proved that this policy was hurting them, causing injury. You do have to have injury to even file a lawsuit. And the second, and did the Biden administration, did President Biden go beyond his authority, beyond his executive authority in doing this and manipulate the Heroes Act? And the court ruled, yes, on both counts, it's pretty technical how Missouri proved that they had injury. They have a program that basically benefits from student loan repayment. And if these loans were forgiven, that they would cause them financial hardship. And so they used that as grounds to challenge the case. Now, the dissenters, who we referenced earlier, said that these were purely ideological and challenging. And they found a justification through this random government program to say, hey, we can challenge this. You know, there might be something to that. I'm sure there's some ideology motivating all this. But it seems that there always is on these big cases. And you could easily say that the defense is just as ideologically motivated. But let's talk about the ideology here for a second. We've used student loan forgiveness.

The loans are forgiven. But it's not like the banks or the financial institutions who provided the loans were not going to get paid back. The debt was being transferred from the borrowers, the individual borrowers, to American taxpayers. Essentially, American taxpayers were going to pay, and I think it totals about $430 billion when you add up all the Americans who had borrowed money for schooling. So American taxpayers were going to pick up that cost. And opponents of Biden's plan said, wait a second, you know, the vast majority of Americans didn't borrow this money. Why should they have to pay it back? It should be on the individuals who borrow the money. They knowingly borrow the money. They knowingly accrued this debt. They knew they were going to have to pay it back. So that's the

that was the ideological argument against it. That's right. Yeah. And the people who would be paying it back were often, or some people who couldn't afford to go to college, right? I mean, so you might have some guy who's, you know, working it hard at his just. job, couldn't afford to go to school, but, you know, you can imagine a truck driver or something who, you know, works a lot of hours turning on the radio and hearing that a gender studies major out of Berkeley is going to get her loan partially forgiven with his tax dollars. It just seems kind of inequitable. Future lawyers, future lawyer.

Right. Yes. Right. And they would actually, I wrote a story at thecenterSquare.com a while back that the lawyers and doctors were the ones who benefited most from this policy because. their loans being delayed actually was, you know, they had the most debt, right? And so therefore, they benefit the most from having the loan repayment delayed these several years. And now that they're going to, you know, graduate and have, have built up all these high incomes or I'll be able to

pay it back faster. So it actually helped doctors and lawyers the most. You know, there's also a question of, I've, no one's really talked about this, but I bring it up periodically of recruitment for the military. You know, we've been writing a lot about that as well at the center's where.com, how the military is struggling to recruit at the levels that it would like to. But you and I know, Dan, that one of the main ways they get people to join the military is paying for their college. Right. I mean, you go to school.

If you go join the military, you're going to get a good, you know, free education. You're going to graduate. And often people who grow up in poor families take that route because they're like, hey, they're going to move up social ladder or the economic ladder, hopefully by getting this education. But if it's just going to be handed out for free, I mean, doesn't that remove. much of the military's recruitment. And the incentive to join the military, right? Why join the military if you have other opportunities if, you know, the federal government's

going to forgive your student loan debt? That's right. And so on the other side of that, what Biden has repeatedly pointed out is that those who owe the most debt is just a racial disparity, basically, and who holds this debt that black Americans and I believe black women in particular hold a higher percentage of this debt. And so there's kind of like there is a racial equity line of argument that the Biden administration has been using. And I mean, look, I know plenty of people who would love to have their loans partially forgiven. I won't say whether or not I would benefit from that.

But I know, you know, here in D.C., and there's some good reporting on this, that this policy would be a windfall for DC staffers because I tell you, this is a very popular policy here in the swamp, Dan, where you have all these young people who went to expensive schools and have tons of debt, but also, you know, maybe they do have a lot of debt, but they all have high earning potentials and great careers ahead of them, making six figures in various, you know, federal agencies, contracting places, all that kind of stuff. So it's a lot of young people who are probably going to be pretty wealthy one day who are going to benefit from this the most. So just to wrap up, the immediate ramifications are this.

Biden's student loan forgiveness plan is over. The pause that's been on repaying student loans pretty much since the beginning of COVID ends later this year. If you do have a student loan, an outstanding student loan out, be aware of what's going on because you're going to have to start repaying that debt here pretty soon. Listeners can keep up with this story and more at thecenter square.com. For Casey Harper, I'm Dan McKeel. Please subscribe. Thanks for listening.