Policy Corner: SCOTUS decision striking down Biden admin's Student Loan Forgiveness Program will have wide-ranging consequences

In 2022, the Biden Administration announced its plan to cancel up to $400 billion in student loans through the Higher Education Relief Opportunities for Students (HEROES) Act, which allowed the Secretary of Education to modify terms for loan forgiveness. In 2023, the Supreme Court ruled 6-3 that the Department of Education did not have the power to cancel that debt. 

Laura Perna, Penn’s Vice Provost for Faculty and the GSE Centennial Presidential Professor in Education, says that the prevalence of educational debt means this ruling will affect a large swath of students. “This is more total debt from student loans than from credit cards — it’s lower only than mortgage debt,” she says. “It’s something that’s now structured into our higher education system — the use of loans to pay college costs is not a choice.” 

Furthermore, Perna highlights that debt does not affect all borrowers equally. She says Black students have an average student loan debt that is $25,000 higher than their white peers. 

Read more in the Fall/Winter 2023 edition of the Penn GSE Magazine.