Credit: Oliver Contreras/Pool via TNS

Credit: Oliver Contreras/Pool via TNS

The United States Supreme Court rejected President Biden’s student loan forgiveness plan Friday, with a 6-3 vote.

Biden’s plan aimed to provide need-based assistance for borrowers by providing $10,000 to those considered to be low income or middle class and $20,000 to those who received Pell Grants. All individuals with an income of $125,000 or below would have been eligible, according to the White House release statement. In total, the program would have cost over $400 billion.

Biden’s three-step plan included providing targeted debt relief, making the student loan system more manageable for borrowers and reducing the overall cost of college, according to the release.

The Supreme Court’s decision was on the basis of whether or not the secretary had the authority and jurisdiction to make such provisions through the Higher Education Relief Opportunities for Students Act of 2003, also known as the HEROES Act, according to the Biden Vs. Nebraska Supreme Court decision.

The document states, “The HEROES Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, but does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal.”

What’s next for student loan debt?

The Biden-Harris Administration announced a new plan Friday after the court’s decision, with the objective to again target debt relief for student borrowers according to the White House release. 

This new plan thus far aims to implement a 12-month “on-ramp to repayment” plan, from Oct. 1, 2023, to Sept. 30, 2024. This action is designed to provide leeway to those struggling to make on-time payments, so that their credit and status does not suffer, according to the release.

In addition, the Biden-Harris Administration created the Saving on a Valuable Education plan, also known as SAVE, which was finalized Friday, according to the release. The plan will allow some borrowers to make $0 monthly payments, cut borrowers’ monthly payments in half and/or save borrowers $1,000 a year.

The release stated, “No President has fought harder for student debt relief than President Biden, and he’s not done yet. President Biden and Vice President Harris will not let Republican elected officials succeed in denying hardworking Americans the relief they need.”