Today, the Supreme Court, in a 6-3 decision, handed down its ruling in Biden v. Nebraska, striking down President Biden’s loan forgiveness plan.
 
According to the ruling, “[t]he 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.”
 
Regardless of the ruling, student loan repayments must restart by September 1, 2023, under the terms of the Fiscal Responsibility Act, which formalized plans already underway by the Department of Education to restart payments at the end of the summer. 
 
In response to today’s ruling, NAICU President Barbara K. Mistick, D.M. issued the following statement:
 
“Today’s Supreme Court ruling makes the restart of student loan repayments somewhat more complicated because 20 million more borrowers will now have to make payments who otherwise would have had their remaining loan balances paid off had President Biden’s loan forgiveness plan been upheld.
 
“Despite the difficulties of restarting loan repayments for 43 million student loan borrowers, the broader policy question is what the federal loan program should look like in the future.  Both the Administration and various members of Congress from both parties have proposals that would fundamentally reexamine the current terms and conditions of student loans, including repayment options and what should be the limit on the amount of interest the federal government charges borrowers, particularly through capitalization.  This is an important conversation that has been overshadowed by the more public debate over student loan forgiveness.
 
“NAICU looks forward to participating in the conversation about the future of student loans, and in particular, how and when the federal government is going to subsidize student loans and how much of the program costs are going to be assumed by borrowers.  In many ways, these questions have not been fully and holistically debated since the federal student loan program began in 1965.”