SCOTUS nixes student debt relief
With the recent blocking of President Joe Biden’s Loan Forgiveness plan by the Supreme Court, many students past and present who were hoping for the act to pass are not panicking with the unknown as the economy is getting worse, inflation and interest rates are skyrocketing, and lack of jobs available, are placing many in serious debt.
Last August, President Biden told federal student loan borrowers that the U.S. government would cancel up to $20,000 of debt for low-income students who had received a Pell Grant to attend college, and up to $10,000 for the vast majority of remaining borrowers. He cited a 2001 law that allows the Secretary of Education “to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.”
Soon after the announcement, six states filed a lawsuit against Biden to stop the plan stating that Biden was overstepping his authority under federal law. The Supreme Court eventually stepped in to review the case. In a 6-3 decision, the Supreme Court blocked Biden’s plan to forgive nearly 430 billion dollars of American student debt, citing it would economically damage the current economy. The prices of tuition and interest rates on loans are damaging to students, and the debt they are accruing is not helping fix the economy.
A study done by Bankrate revealed that 64% of Black respondents and roughly 70% of Hispanic respondents delayed important financial milestones due to their student loan debt, compared to less than half of White respondents. Ninety percent of Black students take out student loans to pay for college, compared to 66 percent of white students. Black students hold almost twice as much student debt as their white peers, largely due to differences in interest accrual and graduate school borrowing. Out of women undergraduate borrowers, the average Black woman carries the most student debt, averaging $41,466.05 one year after graduation.
“Student debt crushes dreams, and it disproportionately crushes the dreams of Americans of color,” California Community Builders CEO Adam Briones said as they talked about the impact college debt has on students of color. “The Supreme Court today guaranteed that these dream-crushing debt burdens will continue unless Congress acts. And I must say I find it ironic that one of the votes to kill relief for student borrowers came from a Supreme Court justice who had a billionaire benefactor pay the expensive private school tuition for the child he was raising. People have a right to be angry over this, and Congress needs to act – now.”
Senate Majority Leader Chuck Schumer also disagrees with the Supreme Court decision ruling, “The hypocrisy is clear: as justices accept lavish, six-figure gifts, they don’t dare to help Americans saddled with student loan debt, instead siding with the powerful, big-monied interests,” Schumer said as he referred to the Justices Clarence Thomas’ and Samuel Alito’s respective ethics scandals as they reportedly accepted luxury gifts and private plane rides to Alaska by republicans before the trial over the progressive debt free plan.