President Joe Biden on Friday accused the Supreme Court of misreading the US Constitution when it canceled its $400 billion student loan forgiveness program, accusing Republicans of cheating the people with their hypocrisy on the matter to take hope.
In a White House speech, Biden said he was “angry” about the decision but outlined several executive branch actions he is taking to make it easier for borrowers to pay off their debts.
He said his new plans would save borrowers $1,000 a year, limit monthly payments to 5 percent of monthly disposable income, and forgive loan balances after ten years of repayment.
A defiant Biden argued he didn’t give people “false hopes” with his $400 billion program, which would have forgiven $10,000 of student loan debt for those earning less than $125,000 or for Households with an income of less than $250,000.
Supreme Court justices on Friday ruled 6-3 that Biden’s proposal to pay off the debts of 26 million Americans at taxpayer expense was unconstitutional and an excess of his executive powers.
The landmark ruling on the final day of the Supreme Court’s term comes 24 hours after judges ruled colleges could no longer use race as an admissions consideration in a case that sparked backlash from Biden.
President Joe Biden criticized the Supreme Court ruling that found his student debt relief program unconstitutional
Biden responded with scathing. As he spoke, he kept leaning over the podium and lowering his voice to a whisper, a tactic he uses when he’s about to say something.
“I didn’t raise false hopes,” Biden snapped when a reporter asked him if he misled borrowers.
“The question was whether I would do more than what was asked.” I thought what I was doing was reasonable and could and would do it. I gave the borrowers nothing wrong. But Republicans have taken away the hope that was given to them, and that’s true. Real hope.’
He criticized the judges for their decision: “I think the court misinterpreted the constitution.”
And he accused Republicans of hypocrisy, arguing that many Republican lawmakers had exploited pandemic-related relief programs for their own corporate debt.
“Members of Congress who were outspokenly opposed to student facilitation received hundreds of thousands of dollars in facilitation themselves for being able to keep business open.” Several congressmen got over a million dollars. All of these credits are given. Do you know how much this program cost? $760 billion. “My program is too expensive?” he said.
“Hypocrisy is stunning,” he added.
Biden also outlined his plan to help borrowers repay their loans after three years of non-payment while the program was contentious in court.
“Today’s decision blocked one path.” Now we will turn to another. “I will never stop fighting for you,” he said.
The Department of Education will also create an affordable repayment plan that will help the typical borrower save more than $1,000 a year:
- The program would adapt existing protocols.
- Monthly payments will be reduced from 10 percent to 5 percent of discretionary income.
- This increases the amount of income that is considered restricted income and is therefore protected from repayment.
- Borrowers with original loan balances of $12,000 or less will have loan balances forgiven after 10 years of payments instead of 20 years
- Don’t burden borrowers with unpaid monthly interest, so unlike other existing income-based repayment plans, no borrower’s loan balance grows as long as they make their monthly payments
In addition, the department will create a temporary 12-month program called the On Ramp Payback Program. If a loan fails to make monthly payments, there is no risk of default under the program. The Department of Education will not report missed payments to credit bureaus for 12 months.
“We will use every resource we have to get you the student debt relief you need and to achieve your dreams.” It’s good for the economy. It’s good for the country. “It will be good for you,” Biden said.
Education Secretary Miguel Cardona brushed aside what would happen if this new program were also challenged in court.
“We will keep fighting,” he said.
President Joe Biden speaks with Secretary of Education Miguel Cardona in the Roosevelt Room
The Supreme Court has rejected President Joe Biden’s $400 billion student loan forgiveness plan in another bombshell decision. The judges ruled 6-3 against Biden’s controversial plan to pay off the debts of around 20 million Americans
Biden’s student loan forgiveness plan would have eliminated $10,000 in debt for borrowers earning less than $125,000 and up to $20,000 for those on Pell scholarships.
However, it was contested by six Republican states and two borrowers, who argued Biden should have sought congressional approval for a plan that was eating up significant taxpayer dollars.
While the borrower’s case was dismissed, the states’ case was decided, with a majority of judges ruling it unconstitutional.
Chief Justice John Roberts agreed, saying in the majority opinion that a move “requires clear language from Congress before a minister (of the Department of Education) can unilaterally transform large parts of the American economy.”
Judge Elena Kagan, in a dissent shared by the court’s other two Liberals, wrote that the majority of the court “overturned the joint judgment of the Legislative and Executive branches, resulting in the removal of credit waivers for 43 million Americans.” ”
Millions of Americans have not had to repay their loans for three and a half years because of the corona pandemic. Borrowers will have to resume payments in October and interest will start accruing again from September.
Biden’s loan write-off was a cornerstone of his presidency, and the ruling will be a major blow to the administration, which has been battling mounting debt.
For months, Biden’s student loan draft has been at the center of a legal battle involving six Republican-controlled states and two borrowers. Iowa, Arkansas, Kansas, Missouri, Nebraska and South Carolina said he had no legal authority to implement the plan without prior approval from Congress.
Student debt relief activists rally outside the Supreme Court
Biden used the post-9/11 HEROES Act to justify the program. It provides that the Department of Education can forgive student debt during a national emergency.
However, the Chief Justice’s majority opinion held that the HEROES Act was not a legitimate basis for the plan.
“Congress did not unanimously pass the HEROES Act with a view to such power,” Roberts writes, saying that such a decision of “this magnitude and scope” would become a matter “of serious and deep debate across the country.” ‘, must be taken by Congress itself.