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June 30, 2023

Biden’s Student Loan Plan Overturned

and What It Means

Today, the US Supreme Court ruled to block President Biden’s plan to cancel student debt on federal loans. This is a significant ruling that pushes back on the federal overreach into higher education.

Chief Justice Roberts delivered the opinion for the court: “The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not. We hold today that the Act allows the Secretary to “waive or modify” existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”

Higher education is currently tainted by a huge student debt crisis. There are approximately 43 million Americans carrying student loan debt, with that total debt exceeding 1.5 trillion dollars. Last year, President Biden proposed a program to cancel student federal loans arguing that this plan would fix the debt crisis. The plan was to cancel up to $10,000 of debt for those making less than $125,000 per year as well as up to $20,000 of debt for Pell Grant recipients. The White House estimated about 26 million people either applied for or would qualify for this program. 

While there is a real crisis in rising student debt, the Supreme Court is right to overturn Biden’s proposal because his plan would not actually fix the problem.

The central problem is colleges and universities that take federal money are growing dependent on that money and are losing their freedom to operate in healthy ways.  

New Saint Andrews College voiced opposition to Biden’s plan last fall. New Saint Andrews President, Ben Merkle, released a statement explaining how Biden’s plan was not a real solution to the problem in higher education debt. In fact, Biden’s plan would have led to other issues and ultimately hurt the American economy and hard-working families. 

Big Ed” is the name Dr. Merkle has given the higher ed crisis. Big Ed is all the academic institutions that the federal government bails out when times get hard rather than forcing them to do the hard work to cut spending and programs. 

Dr. Merkle explained that NSA’s foundational commitment to not take any federal loan money makes us one of only a few colleges in the nation free of federal strings. We see this commitment as the solution to the student debt crisis. 

This Supreme Court ruling puts a much needed check on the endless government money flowing into institutions of higher ed.

Hopefully, this will encourage these institutions to do the hard work of weaning themselves off federal money. Freedom from federal money will enable them to charge reasonable tuition based on the actual market price. This in turn will give students the freedom to see what tuition actually costs and whether they can afford it. This is the truly deep reform that higher education needs.