Supreme Court Strikes Down Biden Student Loan Forgiveness 6-3 - Protects Debt System Against Democratic Relief

The Supreme Court ruled 6-3 on June 30, 2023, in Biden v. Nebraska that the Biden administration exceeded its authority under the HEROES Act in announcing $400 billion in student loan forgiveness, striking down a plan that would have canceled up to $20,000 in debt for Pell Grant recipients and $10,000 for other borrowers earning under $125,000—relief that would have benefited 43 million Americans with 20 million having their debt completely eliminated. The conservative supermajority’s decision protected the predatory student debt system against democratic efforts to provide relief, ensuring that debt weaponized against students through the 2005 Bankruptcy Act and for-profit college fraud would remain non-dischargeable and inescapable.

Chief Justice John Roberts wrote for the majority that while the HEROES Act authorized the Education Secretary to “waive or modify” student loan provisions, the word “modify” meant only “modest adjustments and additions to existing provisions,” not “transform them” through broad-based cancellation. Roberts characterized Biden’s plan as creating a “novel and fundamentally different loan forgiveness program” beyond Congressional authorization. The majority found that Missouri had standing to sue because the state’s loan servicer, MOHELA, would lose revenue from debt cancellation—effectively giving loan servicing profits standing to block relief for borrowers.

Justice Elena Kagan’s dissent, joined by Justices Sotomayor and Jackson, savaged the majority’s reasoning: the HEROES Act explicitly authorized debt modification during national emergencies, COVID-19 was precisely such an emergency, and the Court’s cramped reading of “modify” contradicted statutory text and purpose. Kagan noted the majority had invented a “major questions doctrine” to strike down executive actions the Court’s conservative bloc disfavored, substituting judicial preferences for Congressional authorization. The dissent highlighted that the majority’s standing analysis was nonsensical: MOHELA wasn’t a party and Missouri suffered no direct injury.

The ruling revealed the Supreme Court’s role in protecting kleptocratic systems: the same Court that approved Citizens United (allowing unlimited corporate money in politics), gutted the Voting Rights Act, and blocked labor organizing now protected the student debt industry against democratic relief. The 6-3 breakdown showed judicial capture by the same ideological forces that installed Betsy DeVos, enabled for-profit college fraud, and weaponized bankruptcy against students. Three Trump appointees (Gorsuch, Kavanaugh, Barrett)—installed through Federalist Society vetting and dark money campaigns—voted to strike down relief for 43 million borrowers.

The decision ensured that students remained trapped in $1.6 trillion of non-dischargeable debt while corporations continued using bankruptcy strategically, the Sackler family shielded billions through Purdue Pharma bankruptcy, and Trump filed Chapter 11 six times to escape liabilities. The Court protected a two-tiered system where debt crushes individuals but serves the powerful as a tool. Biden responded by pursuing alternative relief through income-driven repayment and borrower defense regulations, but the ruling demonstrated that even when student debt relief had democratic support and clear statutory authority, the captured judiciary would block it to preserve the predatory debt system.