The Supreme Court ruled Friday that President Joe Biden's plan to wipe out up to $10,000 of student debt for eligible Americans is unconstitutional.
Biden is expected to announce new actions regarding student loans sometime Friday, according to CNN.
The court ruled the federal government overreached its authority with the plans and voted 6-3 to strike down the student loan forgiveness initiative.
What Happened: Former President Donald Trump paused student loan payments amid the onset of the COVID-19 pandemic, but Biden aimed to take it one step further and permanently wipe out $10,000 worth of debt for Americans making less than $125,000 a year and $20,000 for Pell Grant recipients.
"Under the Government's reading of the HEROES Act, the Secretary would enjoy virtually unlimited power to rewrite the Education Act," Chief Justice John Roberts wrote in the majority opinion.
A Texas court struck down Biden's student debt forgiveness, part of the Higher Education Relief Opportunities for Students (HEROES) Act in November. The Justice Department filed an emergency injunction, placing the plan on hold until the Supreme Court's ruling.
Friday is the second consecutive day the Supreme Court made a major ruling related to higher education. The court ruled Thursday that affirmative action, the practice of universities giving admission preference to those from underserved and underrepresented communities, is unconstitutional.
Stocks Moving On The News: Many student loan providers traded lower Friday, despite a potential increase in demand for people borrowing money to pay off their student loans or to refinance.
- SoFi Technologies Inc
(SOFI ) , a 21st-century bank that offers student loans, was trading lower Friday by about 2%. - Upstart Holdings Inc
(UPST ) a fintech company that uses AI to underwrite loans, moved lower following the Supreme Court's announcement, but was still trading slightly in the green around noon Friday. - LendingClub Corp
(LC ) , another loan provider, was also trading lower Friday.
