The Supreme Court Killed Biden’s Student Loan Forgiveness Plan. What Does That Mean For 2024?

On Friday, the last day of this year’s term, the Supreme Court struck down President Biden’s student loan forgiveness plan. The court concluded in a 6-to-3 ruling that the president overstepped his executive authority by making such a large-scale change to the program via a waiver, as laid out in a 2003 law. Chief Justice John Roberts was joined by the five other Republican appointees to the court. “The [2003 law] provides no authorization for the Secretary’s plan even when examined using the ordinary tools of statutory interpretation — let alone ‘clear congressional authorization’ for such a program,” Roberts wrote.

In a dissent authored by Justice Elena Kagan, the three Democratic appointees held that the Biden administration had the authority under the law to enact student loan forgiveness. They also argued that the Court shouldn’t have ruled on the case because the plaintiffs — six states, in this case — lacked a meaningful stake in the case. 

This case is about an important legal concept: the boundaries between executive and congressional power, and how much leeway the executive branch is granted in interpreting and implementing 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 Republican Party began attacking it: No fewer than six lawsuits were filed to stop it. In the case that ended the program, Biden v. Nebraska, Republican governors in that state plus Arkansas, Kansas, Iowa, Missouri and South Carolina argued that Biden didn’t have the authority to forgive up to $10,000 in student loans for most borrowers and up to $20,000 for students who had received Pell Grants in college.

The ruling could have big implications for the 2024 election. Now, borrowers will have to start repaying student loans at the end of the summer without any relief. It’s possible that the people who had looked forward to student loan forgiveness will blame the court for the decision. But it’s also possible that the court’s decision will backfire on Biden. Family budgets, already squeezed by persistent inflation, are likely to be even more so when payments resume, and some voters may see it as a broken promise — one that many Democrats really wanted Biden to fulfill.

There’s a big divide among Americans about whether student loan forgiveness is a good thing at all, with very strong opinions on either side of the aisle. Biden and others have argued that the size of student debt — more than $1.75 trillion held by roughly 45 million Americans — is holding back the economy, contributes to generational inequality by heavily burdening young people, and hurts the 20 percent of student borrowers who ultimately default anyway. Biden has said his plan aims to help working- and middle-class borrowers. In opposition, the Republican Party has claimed Biden’s plan was anti-working class, and that taxpayers who hadn’t gone to college would subsidize college graduates who were on path to earning more.

This is an issue that key Democratic blocs care a lot about. During his 2020 campaign, Biden had 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 Biden voters and 51 percent of Democrats who think it’s a 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 it, by 79 percent, and so did Hispanic voters, at 54 percent; among all adults in those demographics, support was 77 and 52 percent, respectively. College graduates favored it by 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 survey from April found that 83 percent of student loan debt-holders viewed Biden’s plan favorably. 

Student loan forgiveness was also especially popular with young people. Majorities of adults under 45 thought the Department of Education should have the authority to forgive student loan debt: 59 percent of adults under 30 and 54 percent of adults aged 30 to 44, according to a survey from The Economist/YouGov taken in May. The poll from Marquette University Law School found the exact same percentages for registered voters in those age groups viewed Biden’s plan favorably, and so did all adults under 60. 

Voters under 30 are unusually Democratic-leaning, and in 2020 they helped put Biden over the top. There’s also some evidence they came out in force in 2022 to shore up Democratic wins in the House and Senate when the prevailing winds might have otherwise predicted a Republican rout. (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? It’s possible they will blame the Supreme Court, which has seen its popularity take a beating after a series of decisions that push against majority 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. There’s a good chance 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 on Biden as he seeks reelection. A Penn Wharton analysis has found that Biden’s plan, two-thirds of which would benefit low- and middle-income borrowers, could cost as much as $1 trillion. However, there’s also a cost to resuming student-loan payments, as the administration is now obligated to do, in the form of reduced economic activity, which could be a drag on an already shaky economy. A Civic Science poll from June 13 to 14 found that a majority, 58 percent, of student loan debt-holders were at least somewhat concerned about being able to make payments.

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

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