US Supreme Court strikes down Joe Biden’s student loan forgiveness scheme

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The US Supreme Court has thrown out President Joe Biden’s student loan relief scheme in a fatal blow to one of the administration’s flagship programmes that would have wiped out billions of dollars in debt for millions of Americans.

In a 6-3 decision penned by Chief Justice John Roberts, the court’s conservative majority held that the government had no authorisation for the programme under the Heroes Act, which was passed following the September 11 2001 attacks and allowed the administration to grant student loan relief in a national emergency.

Roberts said the Heroes act “does not allow” the administration “to rewrite that statute to the extent of cancelling $430bn of student loan principal”.

The case “implicates many of the factors present in past cases raising similar separation of powers concerns”, he added, citing the decision in West Virginia vs EPA, which last year curbed the environmental agency’s regulatory authority over greenhouse gas emissions.

The court’s conservative justices also joined together in a separate decision on Friday in favour of a Christian website maker arguing she should not be forced to serve a same-sex couple.

The two rulings on the final day of the court’s term are the latest demonstration of how the conservative majority has cemented its influence over social and political issues at a time when some justices are facing scrutiny over their links to rightwing billionaires.

The court’s student loan decision will block one of the cornerstones of Biden’s economic policy. The programme proposed scrapping up to $10,000 in debt for most individuals earning up to $125,000. The non-partisan Congressional Budget Office estimated it would have costed more than $400bn.

In a dissent joined by the court’s two other liberal justices, Justice Elena Kagan wrote the court’s decision went beyond its authority.

“The court substitutes itself for Congress and the executive branch in making national policy about student-loan forgiveness,” Kagan wrote, suggesting the court should not have heard the case at all.

The Biden administration had argued the debt relief plan would offer critical economic support to Americans following the Covid-19 pandemic. A separate pandemic-era pause on student loan repayments is also set to end in the coming months, raising concerns about financial pressure on the estimated 43mn Americans with student debt and the knock-on effects that will have on the US economy.

Biden called the court’s decision “wrong” and said in a statement that “this fight is not over”. He said he would speak later on Friday about his administration’s next steps.

The other decision handed down Friday came in the case brought by a Christian who designs wedding websites in Colorado, who said she should not be compelled to offer her services to a same-sex couple because doing so would infringe on her freedom of speech.

In a decision authored by Justice Neil Gorsuch, the court’s conservative majority held that the US constitution’s First Amendment “prohibits Colorado from forcing a website designer” to create pages that include “messages with which the designer disagrees”.

“The First Amendment envisions the United States as a rich and complex place where all persons are free to think and speak as they wish, not as the government demands,” he wrote.

Justice Sonia Sotomayor, who dissented with the other two liberal justices, called the decision a “grave error,” saying the court had “for the first time in its history, grant[ed] a business open to the public a constitutional right to refuse to serve members of a protected class”.

Mike Pence, the former vice-president and Republican presidential candidate looking to woo social conservatives, said the decision “reminds us that we must elect leaders who will . . . appoint judges who support religious freedom”.

Chuck Schumer, the Senate’s top Democrat, said the court had taken a “giant step backward for human rights and equal protection in the United States”.

Last year, Biden signed into law the Respect for Marriage Act, which codified the rights of same-sex and interracial couples to marry into federal law. The rare bipartisan legislation passed the House and Senate, where 12 Republicans joined 50 Democrats in voting in favour of the bill.

The Respect for Marriage Act was introduced last year after the Supreme Court struck down Roe vs Wade, and conservative justice Clarence Thomas raised the possibility of overturning other longstanding Supreme Court rulings, including access to contraception and the rights of same-sex couples.

Additional reporting by James Politi

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