Biden’s student loan bailout died in the courts, but taxpayers could still be forced to pay the tab
The Obama administration finally has the legal legroom to rescue students from their disastrous student loans. Thanks to a Supreme Court ruling, it may be able to do it without ever having to show evidence that it has found them to be eligible for relief.
The Obama-era rules established that college students are eligible for federal loans only if they’ve taken out federally guaranteed loans or have been denied a loan based on their financial circumstances. Under those rules, if a student receives a loan and doesn’t repay it for three years, or is considered an “undue hardship” and is granted forbearance, the government will reduce the principal remaining on the loan so that it is repaid by the end of the three-year period.
The government’s claim – and the court’s ruling – was that this rule was necessary to prevent a student from defaulting on a “totally free” education in return for loans. Obama officials had said that in theory the rule might prevent some students from taking out unsound loans or from applying for loans, and so, it would be better if the rule prevented them from taking the ones they could have. They also claimed it was “prudent to have rules in place” on student loans.
Except that the Supreme Court ruled, 5-4, that it was not.
The majority opinion did not provide a rationale for its ruling, but according to Bloomberg Business, Justice Samuel Alito wrote the opinion. In a separate opinion, Justice Sonia Sotomayor claimed the rule was “not an abuse of our discretion” in that college students have every right to borrow from the government. “It’s not surprising,” she wrote, “that the government would wish to provide a form of financial relief to students who are paying for a college education.” But she added: “It is a rare case that justifies our deviating from the ordinary rule.”
Alito’s opinion was joined by Chief Justice John Roberts, Clarence Thomas and Anthony Kennedy.
Justice Ruth Bader Ginsburg wrote a separate concurring opinion in which she acknowledged that there weren’t strong enough findings in the case to justify the court’s