The Supreme Court struck down Biden’s Student Loan Forgiveness Plan. What does that mean for 2024? – News Block

On Friday, the last day of this year’s term, the Supreme Court struck down President Biden’s student loan forgiveness plan. The court found in a 6-3 ruling that the president exceeded his executive authority by making a large-scale change to the program through a waiver, as required by a 2003 law. The chief justice , John Roberts, joined the other five Republican appointees to the court. “The (2003 law) provides no authorization for the Secretary’s plan even when examined using the ordinary tools of interpretation of the law, let alone ‘clear authorization from Congress’ for such a program,” Roberts wrote.

In a dissent written by Justice Elena Kagan, the three Democratic appointees argued that the Biden administration had the authority under law to enact student loan forgiveness. They also argued that the Court should not have ruled on the case because the plaintiffs, six states, in this case, lacked significant involvement in the case.

This case is about an important legal concept: the boundaries between the executive and legislative branches, and how much leeway the executive branch is given to interpret and implement laws passed by Congress. But the student loan forgiveness plan has been a major political issue since Biden announced it in August 2022. Almost immediately, the GOP began attacking it: No fewer than six lawsuits were filed to stop it. In the case that ended the program, Biden v. Nebraska, the Republican governors of that state plus Arkansas, Kansas, Iowa, Missouri and South Carolina argued that Biden did not have the authority to forgive up to $10,000 in student loans for most borrowers and up to $20,000 for students who have received Pell Grants. in college.

The ruling could have big implications for the 2024 election. Borrowers will now have to start repaying student loans by the end of the summer without any relief. People who expected student loan forgiveness may blame the court for the decision. But it is also possible that the court decision will backfire on Biden. Household budgets, already squeezed by persistent inflation, are likely to be even tighter when payments resume, and some voters may see it as a broken promise, one that many Democrats really wanted Biden to keep.

There is a big divide among Americans about whether student loan forgiveness is a good thing, with very strong opinions on both sides of the aisle. Biden and others have argued that the size of student debt (more than $1.75 trillion held by approximately 45 million Americans) is holding back the economy, contributing to generational inequality by heavily overburdening the young, and hurting the bottom 20 percent. percent of student borrowers who ultimately default. anyway. Biden has said his plan is aimed at helping working- and middle-class borrowers. In opposition, the GOP has claimed that Biden’s plan was anti-working class and that taxpayers who hadn’t gone to college would subsidize college graduates who were on track to earn more.

This is an issue that is of great concern to the key Democratic blocs. During his 2020 campaign, Biden promised student loan relief, and a majority (64 percent) of Americans think student loan debt is a very or somewhat serious problem, including 56 percent of voters. of Biden and 51 percent of Democrats who think it’s a problem. very serious problem. Some form of student loan relief was an issue during the 2020 Democratic primary season, and Biden’s proposal was popular with the Democratic base. Black voters strongly supported him, 79 percent, and so did Hispanic voters, 54 percent; among all adults in those demographics, support was 77 and 52 percent, respectively. College graduates favored him 65 to 35, according to a Marquette University Law School poll. So did those with advanced degrees, by 64 percent, and, perhaps surprisingly, those with less than a high school education by 80 to 20. Perhaps unsurprisingly, a USA Today/Ipsos poll from April found that the 83 percent of student loan debt holders viewed Biden’s plan favorably.

Student loan forgiveness was also especially popular with young people. Most adults under 45 thought the Department of Education should have the authority to forgive student loan debt: 59% of adults under 30 and 54% of adults 30-44, according to an Economist/YouGov survey conducted in May. The Marquette University Law School poll found exactly the same percentages of registered voters in those age groups who viewed Biden’s plan favorably, as did all adults under 60.

Voters under the age of 30 are unusually Democratic-leaning, and in 2020 they helped push Biden to the top. There is also some evidence that they went into effect in 2022 to shore up Democratic House and Senate victories when prevailing winds might have predicted a Republican defeat. (How much student loans played a role in that, though, is an open question.)

Will Biden voters be disappointed in his administration if he can’t find a way to move the plan forward? They may blame the Supreme Court, which has seen its popularity take a beating after a series of decisions that go against mainstream public sentiment. Fifty-eight percent of Americans disapprove of the Supreme Court, and only 28 percent of Democrats and Democratic-leaning independents view the court favorably. The chances are high that Democratic voters will blame the Supreme Court more than Biden for striking down his plan.

But the economic costs of the plan’s failure may weigh more heavily on Biden as he seeks re-election. A Penn Wharton analysis found that Biden’s plan, two-thirds of which would benefit low- and middle-income borrowers, could cost up to $1 trillion. However, there is also a cost to resuming student loan payments, as the administration is now required to do, in the form of reduced economic activity, which could be a drag on an already shaky economy. A June 13-14 Civic Science survey found that the majority, 58 percent, of student loan debt holders were at least somewhat concerned about being able to make the payments.

What happens to the economy may matter more than the success or failure of any Biden proposal, and voters are already inclined to disapprove of Biden’s handling of the economy. If the burden of student loans makes people feel even worse about their finances, that could spell bad news for his re-election campaign.