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Republican Lawmakers Cost Their Citizens Billions in Killing Blow to Student Loan Forgiveness 

Key Points:

  • President Biden’s Student Loan forgiveness program that would have aided over 40 million Americans in paying off their student loans. 

  • Six Republican state Attorneys General brought suit to block the program.

  • In a divisive ruling, the Supreme Court struck down the program, saying Biden did not have the authority to alleviate student loan debt.

  • Loss of the Student Loan Forgiveness program will cost average Americans, including borrowers in the six states that brought suit, billions of dollars. 

  • In remarks given hours after the Supreme Court decision, President Biden criticized lawmakers who supported loan forgiveness when they benefitted, but would not give relief to millions of hard working Americans.

The Fall of Student Loan Forgiveness

On June 30, 2023, the Supreme Court issued a monumental decision on the final day of its 2022 term. The majority conservative court blocked President Biden’s Student Loan Forgiveness Program. Even while no debt had yet been canceled, the program received over 26 million applicants for relief last year, and the Biden administration approved 16 million of them. There was overwhelming support for the forgiveness program.

 

Despite the program’s popularity, a group of Republican-led states and other conservative bodies challenged the program in court. The Republican lawmakers said that the executive branch does not have the power to cancel student debt in such a broadly proposed program. 

 

In a 6-3 decision, the Supreme Court ruled that the Biden Administration did not have authority under a 2003 federal law to forgive hundreds of billions of dollars of student debt. In the decision, written by Chief Justice John Roberts, the high court ruled in favor of the six states who brought the case forward - Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. 

 

What Does This Mean for Residents of the 6 States?

Over 4.6 million people in the 6 states that brought suit were eligible for relief under the forgiveness program. This means, the Attorneys General in these states cost their constituents nearly $65 billion - roughly $10 billion per state. 

 

If a lawmaker’s job is to represent the best interests of the citizens who elected them, these Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina lawmakers have severely missed the mark. Yet, they will not bear the cost, instead, their citizens will pay it.

What Is Biden’s Plan Going Forward?

President Joe Biden gave his remarks concerning the Supreme Court’s decision on the Student Loan Forgiveness Program only hours after the decision was announced. Maintaining a hopeful attitude, Biden said that he was disappointed in the Supreme Court’s ruling striking down the loan relief program. He maintained that he did not overstep his authority and that he thinks the Supreme Court has misinterpreted the Constitution.

 

The President emphasized that 16 million eligible borrowers had already been approved. “Then Republican elected officials and special interests stepped in and said no, no, literally snatching from the hands of millions of Americans, thousands of dollars in student debt relief,” said Biden in his remarks. 

 

“I was about to change their lives” - President Biden

 

In criticizing those who opposed student loan forgiveness, President Biden noted that many of the same people supported the Paycheck Protection Program implemented during the COVID-19 pandemic when it benefited them. “It was the same elected Republicans, members of Congress, who strongly opposed giving relief to students, that got hundreds of thousands of dollars themselves in relief.” The President added, “Several members of Congress got over a million dollars. All those loans were forgiven, and how much did that program [PPP forgiveness] cost? 760 billion dollars. My program is expensive?”

 

Biden continued to reprimand the Republicans who opposed the program and brought this case forward. Biden asked, “You can’t help a family making $75,000 a year but you can help a millionaire and have your own debt forgiven?” The President then went on to emphasize the benefits that the plan would have brought America. “It would have been good for the American economy, freeing millions of Americans from the crushing burden of student debt, more homes Would have been bought, more businesses would have been started, more couples would have had the confidence to start a family. Millions of people would have felt that they could get on with their lives.”

 

The President stated that he would continue to move forward and that his administration is “moving as fast” as it can in trying to find a new way to provide student loan relief. He announced that his administration would provide a new path forward that is consistent with the Supreme Court’s ruling. “We will ground this new approach in a different law than my original plan, the so-called higher education act. That will allow Secretary Cardona, who is with me today, to compromise, waive, or release loans under certain circumstances.”

What Was the Loan Forgiveness Program?

President Biden introduced his Student Loan Forgiveness plan on August 24, 2022. Upon its release, over 40 million Americans were expected to qualify for federal student loan forgiveness from the Biden administration, with as many as 20 million having their entire loan balance erased. 

 

Early figures from the Biden Administration showed that no state would have seen less than 45,000 residents qualify for up to $10,000 in loan forgiveness. For larger states like California, Florida, Texas, and New York, those numbers of eligible residents were in the millions. 

 

The plan was fairly simple in its base terms. Those with federal student loans who earned less than $125,000, or $250,000 for a couple in the ‘21-’22 fiscal year could qualify for up to $10,000 in relief. Additionally, those who received a Pell Grant were eligible for up to $20,000.  Early White House figures showed last year that 90% of this loan relief would have gone to borrowers earning less than $75k a year. 

 

The White House fact sheet showed that high-population states would see the greatest impact and benefit from the loan forgiveness program. States like California, Florida, Texas, and New York each would have had more than 2 million borrowers expected to qualify for the lower threshold of $10,000 in forgiveness. Moderately sized states like Michigan, North Carolina, Georgia, Illinois, New Jersey, Ohio, and Pennsylvania would have seen more than 1 million qualifying borrowers in that threshold. Even the smallest states would have seen a significant number of eligible borrowers. Wyoming would have seen roughly 50,000 borrowers receiving up to $10,000 each, and North Dakota would have seen roughly 82,000 borrowers in the same category. 


The big hitter - the Pell Grant recipients - would have seen the greatest benefit in each state. Pell Grant recipients qualified for up to $20,000 in forgiveness. Texas and California have over 2.3 million each, which would have qualified for forgiveness. 

State-by-State Forgiveness: 

Below is an early state-by-state breakdown of how many borrowers in each state were expected to receive student loan forgiveness, according to the White House:

State
Estimated Number of Eligible Borrowers (rounded to the nearest hundred)
Estimated Number of Eligible Pell Borrowers (rounded to the nearest hundred)
Wyoming
49,600
31,400
Alabama
588,000
404,900
Alaska
60,500
37,300
Arizona
810,800
554,900
Arkansas
365,600
269,000
California
3,549,300
2,340,600
Colorado
698,100
419,000
Connecticut
454,200
238,200
Washington, D.C.
105,600
60,300
Delaware
116,900
68,000
Florida
2,427,600
1,716,300
Georgia
1,506,100
1,039,100
Hawaii
111,500
65,700
Idaho
201,400
144,900
Illinois
1,486,600
863,600
Indiana
856,400
555,500
Iowa
408,700
248,900
Kansas
360,900
225,500
Kentucky
563,300
394,000
Louisiana
608,100
435,200
Maine
175,000
105,300
Maryland
747,100
419,400
Massachusetts
813,000
401,200
Michigan
1,316,000
849,300
Minnesota
729,700
416,300
Mississippi
417,200
316,400
Missouri
777,300
502,200
Montana
120,400
78,600
Nebraska
232,100
136,000
New Hampshire
175,100
85,300
New Jersey
1,082,900
590,300
New Mexico
215,900
159,000
New York
2,258,800
1,320,100
Nevada
315,800
216,900
North Carolina
1,190,500
785,500
North Dakota
82,000
49,600
Ohio
1,677,800
1,085,700
Oklahoma
454,300
321,600
Oregon
499,000
332,100
Pennsylvania
1,717,300
988,800
Rhode Island
133,900
75,300
South Carolina
681,100
458,400
South Dakota
109,100
65,100
Tennessee
795,300
542,000
Texas
3,323,200
2,306,700
Utah
282,700
206,300
Virginia
965,100
566,500
Vermont
72,200
37,100
Washington
697,600
423,800
West Virginia
213,100
145,000
Wisconsin
685,100
412,700

Courtesy of the White House.

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