SCOTUS: Supreme Court strikes down Biden student loan debt forgiveness program

Issue before or regarding the Supreme Court of The United States

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Supreme Court strikes down Biden student loan debt forgiveness program​

The Supreme Court on Friday struck down the Biden administration's program to forgive student loan debt for more than 43 million American borrowers.

In a 6 to 3 decision, written by Chief Justice John Roberts, the court ruled the Department of Education exceeded its authority when it moved to wipe out more than $400 billion in federal student loan debt.

The program, which invoked emergency powers because of the economic hardship brought by the pandemic, would have canceled $10,000 in student debt for all borrowers who made less than $125,000 and up to $20,000 for borrowers who also received Pell grants.

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Saw a news report on the tv about this and the talking head said Americans support the loan forgiveness. Yeah, I thought, the ones that have student loans do.
 
Good. Now the purple hair, nose ring freaks can keep right on working at Starbucks wondering why they wasted $120k pursuing an Arts degree in Vegetarian Transgender Underwater Basket Weaving.


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Not to worry! The Bidet has a plan B.

He'll try using the Higher Education Act of 1965 to do what the Court said he can't do, because F' the SC for not having a dem majority.
 
Good. Now the purple hair, nose ring freaks can keep right on working at Starbucks wondering why they wasted $120k pursuing an Arts degree in Vegetarian Transgender Underwater Basket Weaving.


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The meme is cute, and I get what it is trying to convey, but the wording isn't really representative of what a "loan" really is.
 
The problem is the government guaranteed loans for junk degrees in order to promote some fantasy agenda and really mess things up more. Just think if schools loaned their own money, do you think they would have a vested interest in preparing students to pay it back instead of exploiting the system?

Not everybody should go to college and anybody that takes out a loan should know they are required to pay it back. Maybe it would be best to expand bankruptcy laws to include student loans?
 
In the hours after Friday's Supreme Court ruling that struck down his attempt to forgive large amounts of federal student debt, President Joe Biden promised two new actions to ease borrowers' burdens. The president's next steps and his rhetoric suggest that little has changed in his flawed logic regarding student loan forgiveness—which has always seemed to have been more about electoral politics than serious policymaking, despite the huge price tag.

Going forward, Biden's student loan plan will include the two steps announced Friday and one lingering element from his earlier proposal that wasn't part of the Supreme Court's review.

First, Biden has invoked a different federal statute in another attempt to unilaterally forgive some student debt. Under powers contained in the Higher Education Act of 1965, Biden intends to direct Secretary of Education Miguel Cardona to "compromise, waive, or release loans under certain circumstances." That will be a federal ruling process, and those tend to take a while—the White House says the first step is a virtual public hearing on July 18—and it is unclear how much debt could be forgiven this way, who would benefit, or what the cost to taxpayers will be.

In the meantime, federal student loan payments will come due again in October after being paused since the COVID-19 emergency was declared in March 2020. But borrowers will be able to ease back into paying what they owe: Biden also announced Friday a 12-month "on-ramp" process during which missed payments will not accrue penalties and won't result in delinquent borrowers having their credit scores dinged.

When they do restart, those monthly payments will be lower than before the pandemic for many borrowers. That's due to the third part of Biden's plan, which caps monthly payments at 5 percent of a borrower's discretionary income—which the Department of Education defines as income that exceeds 150 percent of the federal poverty guidelines. In practice, that means a single borrower with no children starts making payments on income that exceeds $20,400. Additionally, outstanding loan balances will be forgiven after 10 years for those who borrowed $12,000 or less, with a maximum payment period of 20 years no matter how much was borrowed.

That part of the plan isn't new, but the Department of Education finalized those rules on Friday just after the Supreme Court's ruling. "It will cut monthly payments to zero dollars for millions of low-income borrowers, save all other borrowers at least $1,000 per year," Cardona promised.

The consequences of capping monthly payments and also capping the length of time a loan can be in repayment should be fairly obvious: A lot of loans will never get paid back in full. "On average, borrowers (current and future) might only expect to repay approximately $0.50 for each dollar they borrow," the Brookings Institution concluded in an analysis last year.

That's going to create some major perverse incentives in the already screwed-up student loan marketplace. Brookings warns that Biden's income-based repayment plan will result in "tuition inflation" and "increased borrowing," particularly by students in pursuit of "low value, low earning" degrees.
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The meme is cute, and I get what it is trying to convey, but the wording isn't really representative of what a "loan" really is.


Really? In what way is the term used incorrectly? I look up the word "loan" and, used as a noun, the definition goes like this: a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
 
Really? In what way is the term used incorrectly? I look up the word "loan" and, used as a noun, the definition goes like this: a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
That isn't how banks work. That is how friends "loan."

 
I heard Biden he'll just go around the SCOTUS decision...

Nothing like a POTUS who follows the Constitution eh?
 
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