Supreme Court decision on student debt forgiveness leaves Midwest students disappointed and worried
On Friday, the Supreme Court handed down a decision that dismayed millions of people who were hoping for debt relief through President’s Biden program. Many of those borrowers live in the Midwest states that brought the case to the high court.
Selveyah Gamblin graduated from the University of Iowa in 2023 as a political science major with a double minor: public policy and theater studies.
A native of Chicago, Gamblin is the first person in her family to graduate from college. Her parents moved to Peosta, Iowa, seeking a better economic situation while she was still in high school. Like millions of others, Gamblin relied on student loans from the federal government to pay for her studies. She borrowed money to cover tuition and fees, books and living expenses.
“It was similar to a lot of families of color in America who are trying to figure out how to get their first-generation student to college,” Gamblin said. “And it's one of those things where it just comes with the territory, and although it sucks, it's what we have to do in order to have that college education.”
Many students, Gamblin among them, had high hopes for debt relief when the Biden administration announced a program to ease their student loan burdens in August 2022. It would cancel up to $20,000 of debt for low-income students who had received a Pell Grant, and up to $10,000 for the vast majority of remaining borrowers.
Gamblin has $20,000 in student loan debt. Her father took out about $40,000 to help cover her four years at the University of Iowa.
“I was a Pell Grant recipient,” Gamblin said. “Which means, under the Biden student debt forgiveness, that $20,000 would have been forgiven.”
The Biden administration enacted the debt relief program under the HEROES Act.
In a 6-3 decision, the Supreme ruled that federal law does not authorize the Department of Education (DOE) to cancel student loan debt.
Allen Rostron, a law professor at the University of Missouri-Kansas City, said the majority agreed that while the act does allow the DOE to make some changes to the HEROES Act, eliminating billions of dollars in student loans is not among them.
“The Supreme Court said this is a huge restructuring,” Rostron said. “Billions of dollars are involved, and it's a huge restructuring of the program and people's obligations. And we don't think that's what Congress really intended.”
The decision was a blow to Gamblin, who heard the news of the Supreme Court ruling on Friday morning.
“It was devastating. I felt kind of lost,” she said. “I was banking on my student loans being forgiven and being able to go to law school, which is my dream.”
The staff at the Student Debt Crisis Center (SDCC) is also disappointed. The organization works with lawmakers and stakeholders to spur changes to federal student loan policies and connects borrowers with resources that can help them navigate the financial aid system.
“We're devastated,” said executive director Cody Hounanian.”This is not the news we wanted. We're frustrated and angry because the Supreme Court has made a decision based on ideology.”
Polls indicate that most Americans favor some form of student debt relief, but may not agree on how it should be accomplished. A February Research/Shaw & Company Research poll for Fox News showed 62% of respondents agreed some student debt should be forgiven. Another February poll, by YouGov and the Economist, found that 53% of U.S. adults “strongly” or “somewhat” supported the federal government canceling up to $10,000 in student loans for people who earn less than $125,000 a year.
Hounanian said the Supreme Court decision ignores broad sentiment on this issue.
“There are 40 million Americans that were expecting this relief,” he said. “A majority of Americans support some level of student debt cancellation. Not only is the court taking action that's harmful to a huge swath of the American public, they are out of step with what the majority of Americans want in our society.”
In response to the decision to block his student loan forgiveness program, Biden said:
"I will stop at nothing to find other ways to deliver relief to hard-working middle-class families. My administration will continue to work to bring the promise of higher education to every American."
How we got here
In August 2022, the Biden administration used the HEROES Act to bypass Congress and discharge some or all student debt. Congress passed the HEROES Act after the 9/11 attacks to ensure that federal student loan borrowers will not be economically devastated in a national emergency, or a war or disaster. In this case, the national emergency was the COVID-19 pandemic.
A month after the president announced the program, 22 Republican governors signed a letter to Biden about his sweeping plan. In part, they wrote: “...we fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few.”
The governors who signed the letter disagreed that the president had the authority to use the HEROES Act in this way. Among its signers were the governors of Iowa, Kansas, Missouri and Nebraska. This Midwestern bloc of states would later join Arkansas and South Carolina to go a step further. In early March, they asked the Supreme Court to block the student loan forgiveness program.
Six out of nine justices agreed. In fact, Chief Justice John Roberts poked holes in the Biden argument that the loan forgiveness program was only a modification of the HEROES Act. Such broad action, Roberts said, would require congressional approval.
The states that were party to the case were quick to celebrate the ruling. An early reaction came from Iowa Governor Kim Reynolds, who said:
“The Supreme Court’s decision affirms what Iowans have believed this entire time: the hard-working men and women of this country should not bear the burden of paying off others’ loans. This plan belittles Iowans who paid their own debt or chose not to pursue a traditional four-year degree."
"It’s encouraging to see the Supreme Court rein in President Biden’s executive overreach and bring common sense back to the forefront.”Gov. Kim Reynolds, Iowa
Gamblin, who lives in Iowa City, said she feels let down by her family’s adopted state.
“Knowing that most of college, I was a COVID student, and that gravely impacted everything about my life? And knowing that my state decided that any aid for me was not worth it? It’s kind of like betrayal,” she said.
Policy or politics?
According to its own 2023 data, the federal government holds more than $1.6 trillion in student loan debt from more than 40 million borrowers.
In Iowa, Kansas, Missouri and Nebraska, most college graduates have student loan debt. The average graduate owes more than $25,000.
Reynolds and other critics of Biden’s policy object to taxpayers without student loans carrying the burden of paying off debt for those who do.
“There is kind of this gut response from some people that Americans believe that student debt cancellation is unfair,” Hounanian said. “What I actually believe polling is showing is that Americans actually feel that crushing students and families with debt for pursuing an education is what is actually unfair here.”
Eric Berger, a law professor at the University of Nebraska-Lincoln, said there’s no escaping the partisan theme underlying the decision to even bring the case to the high court.
“I think generally the suit was primarily political,” Berger said. “And that's become quite common. When a Democrat is in the White House, you'll have red states challenging what the blue White House is doing. And likewise, when you have a Republican in the White House, you'll have blue States challenging what the Republicans do.”
As a college professor, Berger says he is well aware of the challenges students face when paying for higher education.
“This decision will have a real impact on a lot of those students,” he said. “Law school graduates often can do reasonably well after law school, but other college graduates often can't get those high-paying jobs. So there will definitely be a real world impact for lots of Americans.”
Hounanian said the high cost of higher education in the U. S. means that millions of college hopefuls have few options.
“Unfortunately, many families don't have a choice whether they take out student loans or not,” he said.
That was the case for Jackie Logan of Chesterfield, Missouri, who graduated from Arkansas State in 2006. She earned a bachelor’s degree in dietetics there after transferring from Eastern Illinois University. She’s a native of Kinmundy in southern Illinois where her family’s economic situation meant she had to apply for loans to attend college.
Today, Logan still has about $20,000 to pay off, although now that she’s in a two-income household, she is not as worried about her ability to do so. Her first thought after hearing the Supreme Court’s decision was for recent graduates like Gamblin.
“I worried more for the younger people or the people who don't have the same resources that I now have,” said Logan, who was raised by her grandparents and other relatives. “I was one of those people who didn't have any of the resources. I didn't have the parents. I didn't have a family that could just bail me out.”
Now a married mother of seven-year-old twins, Logan is thinking about how the federal student loan system will work in the future.
“I also worry about what it's doing to our culture, our economy,” she said. “I feel like it's causing younger individuals to be more like they're not able to be autonomous or have their impact on the world. Instead, they're being acted upon.”
Gamblin is hopeful and said she has confidence in her peers.
“It hurts, yes,” she said. “But I don't doubt that many folks who are suffering will be able to overcome and still be successful, and it may be a lot harder, but I don't doubt that greatness is still waiting for a lot of folks.”
The Midwest Newsroom is an in-depth and investigative journalism collaboration including KCUR, St. Louis Public Radio, Iowa Public Radio, Nebraska Public Media and NPR.