What the Supreme Court got right about Biden’s student loan plan

Demonstrators hold signs outside the Supreme Court on June 30. (Tom Brenner for The Washington Post)

In August 2022, the Biden administration decreed $379 billion worth of debt forgiveness for 43 million student borrowers, based on its interpretation of a 20-year-old statute clearly intended to authorize only more selective and limited relief. On Friday, a 6-3 majority of the Supreme Court agreed with Missouri that this interpretation was too creative and must be voided, though to decide the case, the court resorted to creative interpretation of its own — regarding the state’s standing to sue. In this contest between the imperial executive and the imperial judiciary, Congress was mostly a bystander, though both chambers did recently vote by narrow but bipartisan majorities to overturn President Biden’s plan. (Special rules barred a Senate filibuster.) Mr. Biden vetoed that resolution on June 7.

This is not a great moment for the separation of powers. But at least the net effect is positive in policy terms. Mr. Biden’s student loan forgiveness plan was a mistake, and not only because of its high cost and shaky statutory foundation. The plan offered $10,000 for individuals making less than $125,000 a year, and $20,000 for borrowers who were previously recipients of Pell Grants for low-income students. Even so, some $140 billion of the benefit would accrue to relatively well-educated, mostly White students from affluent family backgrounds, according to an analysis by Adam Looney of the Brookings Institution. Every dollar of relief would come from the broader taxpaying public, mostly made up of workers who did not attend or complete college. There’s nothing in it at all for those who saved for college and didn’t borrow.

The plan might still have been worthwhile if it came accompanied by structural reforms to the nation’s system for financing higher education. But it did not. After this one-off benefit for current borrowers, new students would have signed up for loans, possibly borrowing even more than they would have otherwise, given that the Biden administration had created the expectation of another debt write-off someday. There would be no incentive for colleges and universities to control the costs that feed rising tuition rates.

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Also on the Editorial Board’s agenda

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• D.C. Council reverses itself on school resource officers. Good.
• Virginia makes a mistake by pulling out of an election fraud detection group.
• Vietnam sentences another democracy activist.
• Biden has a new border plan.

The D.C. Council voted on Tuesday to stop pulling police officers out of schools, a big win for student safety. Parents and principals overwhelmingly support keeping school resource officers around because they help de-escalate violent situations. D.C. joins a growing number of jurisdictions, from Montgomery County, Md., to Denver, in reversing course after withdrawing officers from school grounds following George Floyd’s murder. Read our recent editorial on why D.C. needs SROs.

Gov. Glenn Youngkin (R) just withdrew Virginia from a data-sharing consortium, ERIC, that made the commonwealth’s elections more secure, following Republicans in seven other states in falling prey to disinformation peddled by election deniers. Former GOP governor Robert F. McDonnell made Virginia a founding member of ERIC in 2012, and until recently conservatives touted the group as a tool to combat voter fraud. D.C. and Maryland plan to remain. Read our recent editorial on ERIC.

In Vietnam, a one-party state, democracy activist Tran Van Bang was sentenced on Friday to eight years in prison and three years probation for writing 39 Facebook posts. The court claimed he had defamed the state in his writings, according to Radio Free Asia. In the past six years, at least 60 bloggers and activists have been sentenced to between 4 and 15 years in prison under the law, Human Rights Watch found. Read more of the Editorial Board’s coverage on autocracy and Vietnam.

The Department of Homeland Security has provided details of a plan to prevent a migrant surge along the southern border. The administration would presumptively deny asylum to migrants who failed to seek it in a third country en route — unless they face “an extreme and imminent threat” of rape, kidnapping, torture or murder. Critics allege that this is akin to an illegal Trump-era policy. In fact, President Biden is acting lawfully in response to what was fast becoming an unmanageable flow at the border. Read our most recent editorial on the U.S. asylum system.

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Unquestionably, the $1.8 trillion in student debt that 43 million people owe represents a burden on household finances for many, and a potential drag on the overall economy. And yet neither effect should be overstated; student debt, at least in part, pays for itself in enhanced human capital, both for individual borrowers and for the economy as a whole.

Mr. Biden said Friday that he would seek a “new path” to debt cancellation based on different legal authority, the 1965 Higher Education Act, though he supplied few details — and raised the question why he did not invoke that statute in the first place. Better for Mr. Biden, and everyone else, to focus on proposals that could make a meaningful dent in the cost of higher education. Loans for graduate education, which are currently allowed without limit and make up an increasing share of total student debt, should be capped. The federal government should use its bargaining power to leverage greater cost control by colleges and universities. More student aid should come from means-tested subsidies such as Pell Grants, as opposed to debt.

Structural reform should be accomplished urgently — and in the clearest statutory language Congress can write.