Supreme Court Stops Biden in His Tracks: $50,000 Student Loan Forgiveness Deemed Unconstitutional

Here is what you need to know:

On June 30, 2023, the Supreme Court ruled 6-3 that the Biden administration could not proceed with its plans to forgive up to $50,000 in student loan debt per borrower.
The ruling was a major setback for the Biden administration, which had made student loan forgiveness a key priority.
The case, Biden v. Nebraska, was brought by a group of Republican state attorneys general who argued that the Biden administration’s plan to forgive student loan debt was unconstitutional.
The attorneys general argued that the Higher Education Act, which gives the federal government the authority to forgive student loan debt, only allows for forgiveness on a case-by-case basis.
They also argued that the Biden administration’s plan would violate the separation of powers by giving the executive branch too much power over the federal budget.
The Supreme Court agreed with the attorneys general, ruling that the Biden administration’s plan was unconstitutional.
The Court’s ruling means that the Biden administration is now limited to forgiving student loan debt on a case-by-case basis.

The potential impact of the Supreme Court’s ruling on the economy and stock market is uncertain:

Some economists argue that the ruling will have a negligible impact on the economy, as the vast majority of student loan borrowers are still able to make their payments.
Others argue that the ruling could have a negative impact on the economy, as it could lead to a decrease in consumer spending and investment.
The impact of the ruling on the stock market is also uncertain.
Some investors may view the ruling as a negative development for the economy and sell off their stocks.
Others may view the ruling as a sign that the Biden administration is less likely to take other actions that could harm the economy, and buy stocks as a result.

The U.S. Supreme Court ruled 6-3 on June 30, 2023, prohibiting the Biden administration from carrying out its plans to forgive up to $50,000 in student loan debt per borrower. The decision was a significant defeat for the Biden administration, which had prioritized student loan forgiveness.

A collection of Republican state attorneys general filed the lawsuit, Biden v. Nebraska, claiming that the Biden administration’s plan to cancel student loan debt was unconstitutional. The attorneys general claimed that the Higher Education Act, which grants the federal government the power to erase student loan debt, only permits forgiveness in exceptional circumstances. Additionally, they contended that the Biden administration’s plan would trample on the separation of powers since it would give the executive branch excessive control over the national budget.

The strategy proposed by the Biden administration was declared unlawful by the Supreme Court, who concurred with the attorneys general. The Biden administration is now restricted, as a result of the Court’s decision, to forgiving student loan debt on a case-by-case basis.

Uncertainty surrounds how the Supreme Court’s decision may affect the economy and stock market. Many borrowers of student loans are still able to make their payments, according to some experts, thus the decision will have little effect on the economy. Others contend that the decision would hurt the economy since it might cause consumers and investors to spend less money.

Additionally questionable is how the decision will affect the stock market. Some investors might decide to sell their stocks because they think the decision would hurt the economy. Others may decide to invest in equities as a result of the decision because they believe the Biden administration will be less inclined to take other steps that could hurt the economy.

The Supreme Court’s decision is anticipated to have a minor overall effect on the economy and stock market. The decision may, however, have a greater effect on specific debtors who hoped to have their student loan debt canceled.