TPA Applauds the Supreme Court for Reining In Biden’s Costly Student Loan Overreach

For Immediate Release                                            Contact: Abigail Graham: (202) 417-7235

June 30, 2023                                                               

WASHINGTON, D.C. – The Supreme Court today struck down President Joe Biden’s attempt to cancel roughly $450 billion in student loans. This decision is a major victory for taxpayers, the rule of law, and separation of powers. Biden’s plan entailed forgiving $10,000 in student loans to all borrowers making up to $125,000 (and relief of $20,000 for eligible Pell Grant recipients). He dubiously drew authority from the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, a statute intended to assist members of the armed services after 9/11.

The Taxpayers Protection Alliance’s President David Williams provided the following comments:

“The Supreme Court’s decision prevents President Biden from shifting hundreds of billions of dollars in student-loan debt onto taxpayers. Had it gone forward, Biden’s program would have forced Americans without college degrees to subsidize those who have them, despite degree earners having higher salaries on average than those who would be subsidizing them. In short, Biden tried to force working-class taxpayers – who may be struggling to meet mortgage or car payments – to pay the tuition of six-figure-earning degree holders.

“The moral hazards created by government interference in higher education have resulted in college tuition growing more expensive – mostly because government keeps subsidizing tuition through generous loan terms. More subsidization isn’t the way out, just like throwing more fuel on a fire is not the way to extinguish that fire. If the student loan bailout continued, students would have learned the lesson that they likely won’t have to pay the tuition costs and debts they incur. This will lead them to make less responsible financial choices when choosing a college – or whether to even go to college – exacerbating the problem further. It will also create greater incentives for future generations of politicians to enact another taxpayer-funded forgiveness efforts or abolish tuition altogether.

“Besides the gambit’s fiscal irresponsibility, the administration’s actions were blatantly illegal, as former Speaker of the House Nancy Pelosi (D-Calif.) has argued. He twisted statutory language and took advantage of a global pandemic to fulfill a campaign promise and try to buy votes with taxpayer money. The Court correctly notes that the HEROES Act ‘allows [the administration] to “waive or modify” existing statutory or regulatory provisions…under the Education Act, not to rewrite that statute from the ground up.’ To suggest otherwise flies in the face of the Constitution’s requirement that Congress holds the power of the purse, not to mention the fundamental legal principle that statutes mean what they say.

“Today’s decision was a clear victory for taxpayers and a lesson for President Biden and future Presidents that attempt Executive Branch overreach.”

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Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.