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Supreme Court strikes down Biden federal student loan forgiveness program

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The Supreme Court prevented the Biden Administration from carrying out a federal student loan forgiveness program.

On Friday morning, the U.S. Supreme Court struck down the Biden Administration’s federal student loan forgiveness program, changing the financial calculus of Nevada’s borrowers.

The ruling, along with the end of the student loan payment pause, reshapes the financial pictures of the nearly 200,000 eligible federal student borrowers in Nevada. Pre-pandemic, Nevada ranked first in the nation in student loan default rate. Nevada’s community college and for-profit students are more likely to default, with College of Southern Nevada, Expertise Cosmetology Institute, and the Paul Mitchell school in Reno seeing default rates greater than 20%.

Winston Berkman-Breen, legal director of the national Student Borrower Protection Center, criticized the decision.

“It's disappointing. It's frustrating. It’s a reflection of the current political environment and the sort of political capture of the Supreme Court,” he said.

Berkman-Breen specifically called out the Court’s finding of standing for the six states that sued. He argued that the entity at the center of the battle, the nonprofit government corporation Missouri Higher Education Loan Authority, is financially separate from the State of Missouri and, therefore, the state could not have been injured by the program.

In a statement, Republican Northern Nevada House Representative Mark Amodei celebrated the decision and said the Court was correct in finding that the Administration did not have the authority to forgive those debts.

By Friday afternoon, however, President Biden had vowed to use authority given to the Secretary of Education to “waive or release” any “lien or demand” in the 1965 Higher Education Act to pursue broad debt cancellation.

As for what Nevada student borrowers can do right now, Berkman-Breen said they should check what debts they still owe, apply for federal relief programs already on the books, and understand possible avenues of recourse under AB 332, or Nevada’s borrowers’ bill of rights that passed last session.

Jose Davila IV is a corps member for Report for America, an initiative of the GroundTruth Project.

The photo included in this story is licensed under Flickr Creative Commons.

Jose Davila IV is a former reporter at KUNR Public Radio.
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