(The Center Square) – Friday’s U.S. Supreme Court decision that struck down the Biden Administration’s plan to write off student loan debt for millions of Americans drew a mixed reaction in Kentucky.
In Biden v. Nebraska, the nation’s top court ruled the administration’s plan unveiled last August to cancel $10,000 in loan debt for individuals making up to $125,000 or married couples making up to $250,000 exceeded the scope of the 2003 HEROES Act. Chief Justice John Roberts wrote for the majority in the 6-3 ruling that the 20-year-old federal law allows “modest adjustments” in loan forgiveness programs but not sweeping changes that “transform them.”
In addition to the $10,000 in forgiveness for all but the top 5% of wage earners, President Biden’s plan would have doubled the debt relief for those who received Pell Grants while in college.
In a statement, Senate Republican Leader Mitch McConnell, R-Kentucky, described the Biden measure as “student loan socialism” that would serve as a “raw deal for hardworking taxpayers.”
“The President of the United States cannot hijack 20-year-old emergency powers to pad the pockets of his high-earning base and make suckers out of working families who choose not to take on student debt,” McConnell said. “The Court’s decision today deals a heavy blow to Democrats’ distorted and outsized view of executive power.”
Not everyone agreed with that point of view. The Kentucky Center for Economic Policy lamented the decision as one that will harm lower-income Kentuckians who were more likely to take on student loan debt.
A 2021 Center report found that more than 615,000 Kentuckians have student loan debt, with an average amount owed of $33,300. Roughly a third of those individuals have $10,000 or less in student loan debt. The report did not break down the income levels of those owing student loans, but the Center estimates a “likely small number” would not have qualified for relief under the Biden Administration plan.
“Many Kentuckians have delayed moving ahead with homeownership, starting a business, saving for retirement or making other important investments because of their student loan balances,” said Ashley Spalding, a research director for the Center. “Without this relief, they’ll continue suffering under the weight of that debt.”
