June 30, 2023 SCOTUS blocks Biden's student loan plan and limits LGBTQ protections

President Joe Biden says his administration is laying out a new path for student loan debt relief which will help as many Americans as possible but will "take longer" to implement than his original forgiveness program, which was blocked by a Supreme Court decision today.

Biden made the announcement as he delivered remarks at the White House on Friday.

He said the steps include a new path toward providing student debt relief "to as many borrowers as possible, as quickly as possible." Biden said the approach will be consistent with today's ruling because it will rely on a different law, the Higher Education Act of 1965.

It will allow Education Secretary Miguel Cardona, who stood alongside Biden, to "compromise, waive or release loans under certain circumstances," the president said.

A long road ahead: Biden said his new path is legally sound, and the best option for his administration. He said his team will move as quickly as possible to put it into place.

Key context: Progressive lawmakers have in the past pushed Biden to use the Higher Education Act as an avenue for student loan forgiveness, but it's unclear whether this new approach could have the same breadth and scope as the current plan.

"On-ramp" for resuming payments: Biden said his administration will also create a temporary 12-month "on-ramp repayment program," aimed at helping borrowers who will need to make difficult decisions when payments resume in October.

Rather than letting people slide into deeper financial trouble when they miss payments on the front end, Biden said the on-ramp will temporarily remove the threat of default or having a borrower's credit damaged for years to come.

"This is not the same as the student loan pause," Biden said. "Monthly payments will be due," bills will go out and interest will start accruing.

"If you can pay your monthly bills, you should," the president continued. But if you can't, the on-ramp will help prevent financial ruin.

The Department of Education won't refer borrowers with missed payments to credit agencies for 12 months "to give them a chance to get back up and running," Biden said.

The president also announced that his administration will reduce the level of income-driven repayments from 10% to 5% of a borrower's disposable income. (Through this program, borrowers pay a fixed rate determined by their income for a set period of time, and are forgiven any remaining balance at the end of that period.)

CNN's Sam Fossum contributed to this report.

Arkansas Attorney General Tim Griffin said the Supreme Court was correct in its ruling to block President Joe Biden's student loan forgiveness program, arguing that it is not legal under the HEROES Act.

"I personally had over $100,000 in my own student loans, and I just finished paying them off in my 40s, after years. So I understand this intimately. This for me is not about policy. This is not a discussion of whether we should or should not forgive loans. That's where people get confused. This is about the law," he said on CNN.

"The simple question was not 'Should we forgive the loans?' The simple question was and continues to be: Does the president have the unilateral authority under the HEROES Act to forgive the student debt? That's the question that was presented. And that's the question that we got an answer to," he said.

Arkansas is one of six plaintiff states the Supreme Court ruled in favor of in this ruling.

About the HEROES Act: The Higher Education Relief Opportunities for Students Act of 2003, known as the HEROES Act, was passed in the wake of the September 11, 2001, terrorist attacks and granted the secretary of education the power to “waive or modify” a federal student loan program in order to ensure that individuals “are not placed in a worse position financially” because of “a war or other military operation or national emergency.”

Lawyers for the Biden administration argued that this provision gives the secretary of education the authority to cancel federal student loan debt so that borrowers are not made worse off with respect to their loans by the effects of the Covid-19 pandemic.

Possible impact on other programs: Griffin was also asked if other programs — such as Medicare and Social Security — could be affected by the precedent set in this ruling.

He said there are lawsuits against the administration related to executive orders and some regulations with different agencies, but he did not elaborate further.

"This does continue to draw a clear line reining in the administrative state ... (which has been) way out of control for a long time, and they've been acting in an extraconstitutional way. And look, the stuff they do can be done, but it must be done by the elected officials in the United States Congress," he said.

CNN's Katie Lobosco contributed reporting to this post.

President Joe Biden said he didn't give student loan borrowers "false hope" with his forgiveness program that was blocked by the Supreme Court on Friday.

He said he believes the Supreme Court “misinterpreted the Constitution" with its monumental ruling.

The forgiveness program, estimated to cost $400 billion, would have fulfilled a campaign promise of Biden’s to cancel some student loan debt. 

Under the president's student loan forgiveness proposal, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year would have seen up to $20,000 of their federal student loan debt forgiven.

President Joe Biden said he empathizes with Americans who may be discouraged by the Supreme Court's decision to block his administration's student loan forgiveness program.

Biden gave details about the loan forgiveness program before it was blocked, saying that 16 million people had already been approved.

"The money was literally about to go out the door, and then Republican elected officials and special interests stepped in. They said, no, no, literally snatching from the hands of millions of Americans thousands of dollars in student debt relief that was about to change their lives," he said.  

The president went on to slam GOP officials who challenged his program.

"These Republican officials just couldn't bear the thought of providing relief for working-class, middle class Americans," he said. 

He continued by saying that the "hypocrisy is stunning" of the differences between his student debt relief program and the Paycheck Protection Program.

More background: Republican-led states and conservatives challenging the program before the Supreme Court claimed that it amounts to an unlawful attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

In the Supreme Court's opinion, Chief Justice John Roberts said the Biden administration and secretary of education rewrote the law. “The Secretary’s comprehensive debt cancellation plan cannot fairly be called a waiver – it not only nullifies existing provisions, but augments and expands them dramatically,” Roberts wrote. “However broad the meaning of ‘waive or modify,’ that language cannot authorize the kind of exhaustive rewriting of the statute that has taken place here.”

The White House sought to use the Higher Education Relief Opportunities for Students Act of 2003, known as the HEROES Act, to waive the debt.

The HEROES Act, which was passed in the wake of the September 11, 2001, terrorist attacks, grants the secretary of education the power to “waive or modify” a federal student loan program in order to ensure that individuals “are not placed in a worse position financially” because of “a war or other military operation or national emergency.”

Roberts said the government needed direct authorization from Congress.

CNN's Ariane de Vogue, Tierney Sneed and Katie Lobosco contributed reporting to this post.

President Joe Biden is delivering remarks from the White House about the Supreme Court's decision to block his administration's student loan debt forgiveness program, which aimed to deliver up to $20,000 of relief to millions of borrowers.

Biden slammed the decision in a statement earlier Friday, claiming that the "fight is not over." He said he would have "more to announce" when addressing the nation this afternoon.

"I believe that the Court’s decision to strike down our student debt relief plan is wrong," Biden said. "But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families. My Administration will continue to work to bring the promise of higher education to every American."

More about the program: The White House has said that it received 26 million applications to the program before a lower court in Texas issued a nationwide injunction in November and that 16 million of those applications had been approved for relief.

The plan would have assisted borrowers who make less than $125,000 a year ($250,000 for households) in 2020 or 2021. He argued the relief program was necessary in order to avoid a surge in defaults or delinquencies for those impacted by Covid who have outstanding loans.

Republican-led states and conservatives challenging the program claimed it amounts to an unlawful attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

CNN's Ariane de Vogue and Tierney Sneed contributed reporting to this post.

Justice Amy Coney Barrett, in a concurrence to Friday’s ruling striking down President Joe Biden’s student debt forgiveness plan, defended the Supreme Court conservative majority’s use of a controversial legal theory and – deploying analogies concerning babysitters and grocery store owners – laid out how she believed the doctrine should be used in the future.

The grocer hypothetical concerned a store owner who typically keeps 200 apples on hand and then instructs a clerk to “go to the orchard” to buy more apples.

A second hypothetical centered on a babysitter who took the kids to an amusement park for the weekend, having been given a parent’s credit card and told: “Make sure the kids have fun.”

But whether the babysitter misinterpreted the okay she got to use the parent’s credit card may depend on other obvious or even less obvious facts, Barrett said.

Barrett wrote that, under one set of contextual facts, the babysitter’s move would seem to overreach on an instruction that was meant for a trip to the “local ice cream parlor or movie theater, not on a multiday excursion to an out-of-town amusement park.”

But under another set of circumstances – “maybe the parent left tickets to the amusement park on the counter” or perhaps the parent told there was $2,000 budgeted for weekend entertainment – the babysitter’s move to go the amusement park would seem a “reasonable” understanding on what the parent had approved, Barrett said.

“If a parent were willing to greenlight a trip that big, we would expect much more clarity than a general instruction to ‘make sure the kids have fun,’” she wrote.

Read more:

Colorado Attorney General Phil Weiser condemned the Supreme Court’s ruling in favor of a web designer in the state who refuses for religious reasons to make websites to celebrate same-sex weddings. He described the decision as a “radical opinion" that is "far outstep of the will of the American people and our values as Americans.”

The Supreme Court’s decision promises to “destabilize the public marketplace” enabling all types of businesses to have “a first amendment right to refuse customers because of who they are,” according to Weiser.

“This case will have the impact to cause considerable mischief undermining the principle that once you open up the doors to the public as a business, you have to serve all comers,” Weiser said. “In Colorado, we prize equality and fairness…we’re going to work hard, working within this opinion to make sure that we can and we will hold accountable those who engage in unlawful discrimination.”

“As Justice Sotomayor’s dissent makes plain, everyone has a choice and everyone has a responsibility towards our nation’s highest ideals. Those ideals are of inclusion, that we see everybody, and that love is love,” he said. “That is the most important response we can show here as individuals, as businesses, as leaders, as allies.” 

The Supreme Court wrapped up its current term Friday by releasing opinions on two momentous cases related to student loans and LGBTQ rights.

Here's a look at some of the key decisions the conservative court released this term — and how the justices ruled on each:

After a more than three-year pause, borrowers will have to restart paying their federal student loan bills in October.

Payments were set to resume this fall even before the Supreme Court struck down the Biden administration's proposed student loan forgiveness program. Interest is set to restart accumulating on September 1.

Borrowers typically receive their bill statements from their loan servicer a few weeks before they are due. Not every borrower’s bill is due at the same time of the month.

The Department of Education has said it will be in direct communication with borrowers and ramp up its communication with student loan servicers before repayment resumes.

What to do next: Student loan experts recommend that borrowers reach out to their loan servicer with any questions about their loans as soon as possible, especially if they are interested in enrolling in an income-driven repayment plan. Those plans, which set payments based on income and family size, can lower monthly payments but require borrowers to submit some paperwork.

Borrowers will also have to reauthorize the automatic debit from their accounts to pay their monthly loan bill even if they authorized the withdrawals before the pause began.

The National Association of Student Financial Aid Administrators warns that borrowers may need to have patience when contacting their student loan servicer, which might be overwhelmed with a high volume of inquiries at this time.

Read more tips and info about your next steps here.

Some borrowers could be at risk of default: Some borrowers may struggle to resume paying their monthly student loan bills, which were typically between $200 and $299 before the pause went into effect, according to the Federal Reserve.

More borrowers are currently behind on other kinds of bills than they were before the Covid-19 pandemic, according to a recent study by the Consumer Financial Protection Bureau.

The report also said that about 1 in 5 student loan borrowers have at least two risk factors that suggest they could struggle when scheduled payments resume, like being delinquent on student loan payments before the pandemic or having multiple student loan servicers.

When payments restart, many people might be confused about how much they owe, when to pay and how. Millions of borrowers will have a different servicer handling their student loans since the last time they made a payment. Some people may have been in school when the pause started and will be making a payment for the first time.