The Supreme Court on Friday blocked President Joe Biden’s $400 billion plan to cancel or reduce federal student loan debts for millions of Americans, including nearly 700,000 Washingtonians.
The 6-3 decision, with conservative justices in the majority, said the Biden administration overstepped its authority with the plan, leaving borrowers on the hook for repayments that are expected to resume in the fall.
The plan would have canceled $10,000 in student loan debt for an estimated 40 million Americans making less than $125,000 or households with less than $250,000 in income.
Pell Grant recipients or undergraduates with the most significant financial need would have had an additional $10,000 in debt forgiven, according to the plan.
In Washington state, as of September 2022, nearly 783,000 residents collectively held $28.2 billion in outstanding federal student loans. Nearly half are burdened with federal loans of more than $20,000, and over 77% are under the age of 50.
The majority of Washingtonians eligible for the student debt relief program — 61%, or 423,800 — were Pell Grant recipients, according to the White House.
When Biden’s student debt relief program opened last August, the Evergreen State was among the top 10 in the country to immediately jump at the chance to apply. About 486,000 Washingtonians applied and nearly two-thirds, or 308,000, received full approval before the plan was halted, tangled in a web of lawsuits and an intense partisan battle.
Student loan repayments will resume in October, although interest will begin accruing in September, according to the Education Department. Payments have been on hold since the start of the coronavirus pandemic more than three years ago.
