The Supreme Court ruled Friday that the Biden administration’s plan to forgive student loan debt was unconstitutional.
This single ruling may have lowered the deficit by nearly $400 billion, according to the Committee for a Responsible Federal Budget (CRFB).
The Biden administration’s decision to offer student debt forgiveness to millions of Americans circumvented Congress’ constitutional right to make laws on spending, the Supreme Court ruled, according to Reuters.
By ruling against Biden’s plan, the Supreme Court has shaved off $400 billion from the deficit, saving taxpayers about $30 billion annually for the next decade, according to the CRFB.
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“The President’s unilateral student debt cancellation plan was expensive, inflationary, poorly targeted, and would have done nothing to improve the affordability of higher education. With today’s Supreme Court decision, it’s time to put these costly cancellation schemes behind us,” Maya MacGuineas, president of the CRFB said in a statement.
“We hope today’s decision will dissuade this and future Presidents from attempting such costly unilateral actions without Congressional input,” MacGuineas said.
Massachusetts Democratic Sen. Elizabeth Warren disagreed with the ruling, and urged Biden to keep pressing for student debt forgiveness, saying, “This fight is not over. The President has more tools to cancel student debt — and he must use them.”
A deficit increase of $1.539 trillion is expected this year due to falling revenues and higher spending and healthcare costs, according to the Congressional Budget Office.
Reversing the student loan plan would make this year’s fiscal deficit appear to fall slightly from 2022, according to Reuters.
Student loan payments will restart in October, according to the Federal Student Aid website.
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