What to know about the U.S. Supreme Court’s ruling on student loan debt forgiveness

The U.S. Supreme Court struck down Friday President Joe Biden’s plan to provide student debt forgiveness through the HEROES Act.

The HEROES Act of 2003 authorizes the U.S. Secretary of Education to “waive or modify” student financial assistance programs in the face of national emergencies. The plan to erase student loans, first announced last year, had been in limbo for months.

With student loan repayments set to resume later this year, millions of borrowers were hoping for some relief. Roughly 43 million people across the country owe more than $1.6 trillion in federal student loan debt, according to the U.S. Department of Education.

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More than $127 billion in such debt belongs to about 3.8 million Texans.

Here’s what Texans need to know about the Supreme Court’s decision.

What is Biden’s student loan forgiveness plan?

Last year, Biden announced plans to cancel up to $10,000 in student loan debt for borrowers earning less than $125,000 or for households making less than $250,000.

Pell Grant recipients could get an additional $10,000 of debt forgiveness — or up to $20,000 total.

Roughly 20 million Americans’ debt would be completely wiped if they applied, according to the Biden administration’s estimates at the time.

Why did the Supreme Court get involved?

A handful of Republican-led states and individuals challenged the constitutionality of Biden’s plan to erase student debt. The lawsuits aimed to stop the rollout of Biden’s plan.

Supreme Court judges heard arguments back in February. This paused the administration’s federal student debt cancellation program for months.

One justice suggested that the administration had exceeded its authority, according to The Associated Press.

Solicitor General Elizabeth Prelogar argued that the administration cited the pandemic as reason to forgive student loan debt through the HEROES Act, which allows the secretary of education to “waive or modify” student financial assistance programs in the face of national emergencies.

Will this impact the resumption of student loan repayments?

No. Despite the Supreme Court’s decision, one thing is certain: Student loan borrowers will soon have to start repaying their federal student loan debt after the pandemic set off a three-year pause.

Student loan interest will resume Sept. 1, and payments will be due starting in October, according to the Department of Education.

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