The Supreme Court blocks Joe Biden’s student-debt-relief plan
IN ITS LAST decision of the 2022-23 term, the Supreme Court on June 30th scuttled President Joe Biden’s plan to cancel some $430bn in federal student debt. About 20m borrowers who stood to see their debts erased and another 23m whose median debt would have shrunk from $29,400 to $13,600 are now, with the decision in Biden v Nebraska, facing payments (set to resume in October) on the full balance of their student loans.
It has been a while since student borrowers have had to make their monthly payments. Donald Trump put them on pause in March 2020 and extended the forbearance twice. Once Mr Biden took office, he offered extensions until the summer of 2022, prolonging an expensive and regressive policy. When the extensions ran out he said payments would resume but with the sweetener of a new programme eliminating up to $10,000 of debt for borrowers making under $125,000 a year and up to $20,000 for those who had received Pell grants (aid for low-income students) during their college days.
Lawsuits immediately sprang up, and Mr Biden’s programme was put on pause. Mr Biden claimed the HEROES Act, a 2003 law passed during the Iraq war, allowed the secretary of education to “waive or modify” rules governing student loans when a “national emergency”—in this case, the pandemic—might put borrowers in a worse position financially.
2023-06-30 15:59:20
Link from www.economist.com
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