Locally, the reaction to the decision was mixed.
Samantha Panson, a 2017 college graduate who works in nonprofits and development and lives in Beavercreek, said she was disappointed in the Supreme Court decision but not surprised.
She is still hopeful she can get some of her remaining $16,000 in loans forgiven under the Public Service Loan Forgiveness program, which forgives parts of loans for some people who work in government and nonprofit jobs. However, the program has a spotty reputation for approving forgiveness, and Panson said she missed three years of payments because her loans weren’t being automatically paid during the last three years, so she has a long way to go before she could be approved.
“It’s kind of one of those things where you set it and forget it,” Panson, a first-generation college student, said. “So yeah, you don’t realize that payments aren’t being taken out.”
Panson said she would have to do some reconfiguring with her budget to make payments, which are due again starting in October.
Luke Gibson, a Liberty Twp. resident, said he felt the Supreme Court’s decision was the correct one. He said he realized the student loans issue is a big problem for many people, but his bigger complaint was that students shouldn’t be allowed to take out loans at 18 years old, without understanding the significance of the debt or knowing for sure what they want to do with a college degree.
“I just think that’s a problem when (students) are not sure what to do, but they’re getting thousands of dollars that they’re going to have to pay off anyways,” Gibson said. “So I think if the government stopped issuing loans, that would force a lot of these colleges to lower prices.”
Gibson said he had some student debt from a short stint at University of Cincinnati’s Blue Ash campus but had been able to pay it off. While not opposed to going back to school, Gibson said he is currently working other jobs and trying to figure out what, if anything, he would want to do with a college degree.
Vann Newkirk, president of Wilberforce University in Greene County, said the decision could deter low-income students - students that would attend a traditionally Black university like Wilberforce - from coming to school, because they would be less willing to take out loans.
Newkirk said about 90% of Wilberforce students are eligible for Pell grants, meaning they are lower-income students who need additional financial help to afford college.
“I think that the crisis with student loans now is going to create not only a fear of students to take on these loans, but it’s going to impact enrollment,” Newkirk said.
He argued the student debt crisis would also impact students who want to go into occupations like teaching or social work, which don’t make a lot of money but often require a master’s degree and additional debt.
“This is a time that you know, we need to look for more resources, more revenue, people to come to our institutions to invest so that our students and we can afford to educate these students,” Newkirk said.
The president said in a statement the ruling was wrong and accused Republicans of “stunning” hypocrisy on the issue.
The court held that the administration needed Congress’ endorsement before undertaking so costly a program. The majority rejected arguments that a bipartisan 2003 law dealing with national emergencies, known as the HEROES Act, gave Biden the power he claimed.
“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.
Justice Elena Kagan, wrote in a dissent, joined by the court’s two other liberals, that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.” Kagan read a summary of her dissent in court to emphasize her disagreement.
Roberts, perhaps anticipating negative public reaction and aware of declining approval of the court, added an unusual coda to his opinion, cautioning that the liberals’ dissent should not be mistaken for disparagement of the court itself. “It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country,” the chief justice wrote.
Loan repayments will resume in October, although interest will begin accruing in September, the Education Department has announced. Payments have been on hold since the start of the coronavirus pandemic more than three years ago.
The forgiveness program would have canceled $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would have had an additional $10,000 in debt forgiven.
Twenty-six million people had applied for relief and 43 million would have been eligible, the administration said. The cost was estimated at $400 billion over 30 years.
Advocacy groups supporting debt cancellation condemned the decision while demanding that Biden find another avenue to fulfill his promise of debt relief.
Natalia Abrams, president and founder of the Student Debt Crisis Center, said the responsibility for new action falls “squarely” on Biden’s shoulders. “The president possesses the power, and must summon the will, to secure the essential relief that families across the nation desperately need,” Abrams said in a statement.
The loan plan joins other pandemic-related initiatives that faltered at the Supreme Court.
Conservative majorities ended an eviction moratorium that had been imposed by the Centers for Disease Control and Prevention and blocked a plan to require workers at big companies to be vaccinated or undergo regular testing and wear a mask on the job. The court upheld a plan to require vaccinations of health-care workers.
The earlier programs were billed largely as public health measures intended to slow the spread of COVID-19. The loan forgiveness plan, by contrast, was aimed at countering the economic effects of the pandemic.
In more than three hours of arguments last February, conservative justices voiced their skepticism that the administration had the authority to wipe away or reduce student loans held by millions.
Republican-led states arguing before the court said the plan would have amounted to a “windfall” for 20 million people who would have seen their entire student debt disappear and been better off than they were before the pandemic.
Biden said GOP officials “had no problem with billions in pandemic-related loans to businesses. ... And those loans were forgiven. But when it came to providing relief to millions of hard-working Americans, they did everything in their power to stop it.”
Roberts was among those on the court who questioned whether non-college workers would essentially be penalized for a break for the college educated.
In contrast, the administration grounded the need for the sweeping loan forgiveness in the COVID-19 emergency and the continuing negative impacts on people near the bottom of the economic ladder. The declared emergency ended on May 11.
Without the promised loan relief, the administration’s top Supreme Court lawyer told the justices, “delinquencies and defaults will surge.”
At those arguments, Justice Sonia Sotomayor said her fellow justices would be making a mistake if they took for themselves, instead of leaving it to education experts, “the right to decide how much aid to give” people who would struggle if the program were struck down.
The HEROES Act — the Health and Economic Recovery Omnibus Emergency Solutions Act — has allowed the secretary of education to waive or modify the terms of federal student loans in connection with a national emergency. The law was primarily intended to keep service members from being hurt financially while they fought in wars in Afghanistan and Iraq.
About the Authors
