Dr. Nick Hillman’s Take On the SCOTUS’ Recent Decision on Student Loan Debt Relief
On June 30th, the US Supreme Court blocked President Biden’s plan to cancel up to $20,000 in federal student loan debt. I have been following these developments closely over the past year and was not surprised by this outcome because the court has ruled similarly in other recent cases. In these cases, the majority opinion invoked the “major questions doctrine” which basically says Congress needs to give federal agencies clear authority to act on issues of broad economic or political significance. The court’s majority did not think the HEROES Act gave the U.S. Department of Education clear enough authority while the court’s minority said it clearly did.
What was surprising was what happened within hours of the court’s decision: President Biden announced a new debt cancellation plan tied to the Higher Education Act. This plan will be developed through the negotiated rulemaking process over the next several months. I didn’t see this coming and will now closely follow Round Two of debt cancellation debates.
Regardless of where these debates go, my focus has been–and continues to be–on restarting loan repayment. The repayment system has been shut down for nearly three and a half years and its restart this October will be difficult for millions of borrowers. Canceling debt would have helped in this restart, but it would not have fixed the fundamental problems facing our student loan repayment system: many loan programs are overly complicated, burdensome, and have too few consumer protections. I am inspired by our work in the SSTAR Lab that aims to address these problems to help policymakers and practitioners find solutions so more people can pursue higher education without money getting in the way.