Updated at 3:51 p.m. June 30
Hundreds of thousands of student borrowers in Massachusetts waiting for student debt relief had those hopes dashed Friday following a new Supreme Court ruling striking down a federal loan forgiveness plan.
The plan, proposed by President Joe Biden's administration last year, would have canceled more than $400 billion in student loan debt and been one of the most expensive executive actions in history. An estimated 813,000 student borrowers in Massachusetts would have been eligible for relief, according to data from the Department of Education.
Writing for the conservative majority opinion, Chief Justice John Roberts said the plan was unconstitutional because it was not authorized by Congress.
Claudio Martinez, a student advocate for debt relief and executive director of the nonprofit group Zero Debt Massachusetts, said the decision deals a blow to efforts to shrink the nation’s wealth gap.
“Student loan debt disproportionately affects Black women and people of color,” Martinez said after the Supreme Court decision was announced Friday. “It fuels economic, gender and racial inequalities, and it also limits the borrower's ability to own a home, start a small business and for families to save for retirement.”
Carlos Rios, who works as a legislative aide at the Massachusetts State House and is a Brookline Town Meeting member, is furious over the ruling. Although he only has $10,000 in student debt, many of his friends hold much higher debt and will be greatly impacted by today’s decision. He said the ruling will prevent people from planning their future.
“Our generation has been pushed back on a lot of things,” said Rios. “We don’t earn a living wage. We can’t afford to live on our own or to start families because we are focused on paying student loans.”
Emy Takinami was hopeful the debt relief plan would allow her and her partner to save for a home. They collectively owe $80,000 in student loans, and are sad to be facing higher monthly payments instead of adding to their savings.
“The decision impacts our ability to buy a home,” she said. “... It was already a pipe dream to purchase a home in the Greater Boston area.”
"We can't afford to live on our own or to start families because we are focused on paying student loans."Carlos Rios
The ruling is the second major decision by the nation’s top court affecting students and higher education this week. The other landmark decision by the majority conservative court undercut decades of legal precedent allowing colleges to consider students’ race as one of several factors for admission.
U.S. Rep. Ayanna Pressley said during an appearance on Boston Public Radio that the Supreme Court's decisions this week were a "one-two punch" that disproportionately affect the most marginalized people in the United States.
Retired federal judge Nancy Gertner said she has struggled to find the balance between criticizing the Supreme Court justices' actions without undermining the institution, but ultimately, she has felt it's important to speak up.
“There have been conservative courts, there have been liberal courts … there has never been a court that is aggressively undoing precedent like this court is,” she said on Boston Public Radio.
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The student debt debate erupted nationally last September, just before the midterm elections, when Biden and U.S. Education Secretary Miguel Cardona announced a sweeping student debt relief plan. After seeing the staggering price tag, some Republicans and Democrats said colleges should assume some responsibility for students who default on those loans.
Colleges and their lobbyists opposed the idea, saying that forcing colleges to share the default risk of student loans would only increase their costs.
Six Republican-led states, including Missouri, challenged the legality of the administration’s plan, arguing that the move was an overreach and beyond the secretary’s authority.
On Friday, Roberts and the court’s five other conservative justices agreed.
That will mean 1 in 8 Americans with federally backed loans will have to restart their loan payments.
In Massachusetts, more than 593,000 people were already deemed eligible for student loan debt relief through a web application. The Education Department approved more than 380,000 of the applications through that process.
Following the state lawsuits, those applications were blocked temporarily. Now, following the court’s decision, they appear to be blocked permanently.
Gabriela Toro graduated from the University of Massachusetts–Boston in 2020 with a degree in psychology and human resources. Although she worked full-time while attending school, Toro holds more than $40,000 in student debt.
“I don’t make enough to be able to begin to pay such large payments given my loan balance,” she said. “I don’t know what’s going to happen.”
Vanessa Snow, of Hyde Park, has about $35,000 in student loan debt and was grateful for the pause in payments.
“I benefitted greatly from not having to pay those loans,” said Snow. “It allowed me to focus on paying down some of my private student loan debt and credit card debt, and I was even fortunate enough to buy a home that I wouldn’t have been able to do if the payments had resumed sooner.”
Now, she will need to make monthly payments of between $300 and $500. But she remains hopeful that the government will find another way to forgive the student loan debt.
U.S. Sen. Elizabeth Warren, a champion for loan forgiveness who spent months urging the Biden administration to act, vowed to continue fighting for sweeping debt relief.
“The same Supreme Court that overturned Roe now refuses to follow the plain language of the law on student loan cancellation,” Warren said. “This fight is not over. The President has more tools to cancel student debt — and he must use them.”
U.S. Rep. Ayanna Pressley said during an appearance on Boston Public Radio that she’s been communication with the Biden administration to discuss “contingency plans” in case the Supreme Court ruled against the debt relief program.
“We need to move decisively and swiftly,” she said. “I’d like to see them announce today that they’ll use another tool — or 40 — to honor their promise to cancel student debt for the millions of people who were eligible.”
In the meantime, Massachusetts Attorney General Andrea Joy Campbell said her office is available to help borrowers prepare for the resumption of payments and
find other student loan assistance programs.
This story was updated with additional reactions to the ruling.
