After an ugly few months in the court for Joe Biden’s student debt forgiveness plan, the Supreme Court delivered a death knell for the effort and its 45 million benefactors on Friday, Jun. 30, 2023.

The court struck down President Biden’s student loan forgiveness, siding with six states that sued to stop the plan, arguing that Biden didn’t have the authority to give $10,000 in forgiveness for most borrowers (and up to $20,000 for Pell Grant recipients.) 

The total amount of forgiveness under the plan was expected to eclipse $400 billion. 

Dissenters on the court argued that the Supreme Court was wasting its time, adding that the states which sued in the first place couldn’t prove how it harmed them. One loan servicer central to the winning case, the Missouri Higher Education Loan Authority, claims that it didn’t even file, solicit, or engage with the case. 

Yet, conservatives sided with the states, which argued that MOHELA would lose revenue as a result of debt cancellation—and consequently, that would harm funding for in-state schools. They didn’t mention that MOHELA has not actually made contributions to the fund in question in their argument.

As a result, 45 million benefactors—and their $1.75 trillion in outstanding debt—are now lining up to begrudgingly pay the piper. As a condition of the debt ceiling deal made in May 2023, which helped avoid a government shutdown, U.S. student loan interest is expected to resume accruing on Sept. 1, 2023. 

A month later, on Oct. 1, 2023, students will be expected to resume making payments. The Biden administration insists it has a Plan B for student loan forgiveness, which basically amounts to “throwing the book” at the problem.

The Biden administration rolled out a revised Pay-As-You-Earn plan for federal student loans which will protect additional income, and reduce some borrowers’ payments to a $0 payment. Then, after “repaying” the balance for at least 20 or 25 years, the government would discharge the loan.

In effect, the new IDR is tantamount to a form of student forgiveness—and one which could cost nearly as much as the proposed student loan plan. On Jul. 14, the Biden administration forgave $39 billion in student debt from nearly a million borrowers using the new SAVE plan. 

At face, that might not sound like a lot. Over the long run, it could be very expensive: an analysis from Penn Wharton shows that SAVE could cost up to $361 billion over the next 10 years. 

That sticker price could raise alarms with legal gurus and conservatives, prompting another faceoff. However, while Biden’s ultimate plan might hinge on Democrats seizing control of Congress, it does little to solve a systemic problem: the sheer unaffordability of an education.

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