Biden’s student-loan forgiveness plan gets cold reception from conservative justices
SCOTUSblog by Amy Howe 2/28/2023
The Supreme Court on Tuesday appeared skeptical of the Biden administration’s student-loan debt-relief program. During nearly three and a half hours of oral arguments, a majority of the justices appeared unconvinced that Congress intended to give the secretary of education the power to adopt the program, which has an estimated price tag of $400 billion.
A ruling in favor of the challengers would obviously be a major blow for President Joe Biden, who enacted the debt-relief program to fulfill a campaign pledge. But the court’s decision could also have a much broader legal impact, affecting when and how states can go to court to challenge federal policies and how courts should interpret other laws giving powers to federal agencies.
Biden announced the debt-relief program, which would forgive up to $20,000 in loans for qualifying borrowers, last August. At that point, student-loan repayments had already been on hold for nearly two years: In March 2020, then-Secretary of Education Betsy DeVos suspended both repayments and the accrual of interest on federal student loans because of the COVID-19 pandemic. Both DeVos and the Biden plan relied on the HEROES Act, a law passed after the Sept. 11 attacks that gives the secretary of education the power to respond to a “national emergency” by making changes to the student-loan programs so that borrowers are left not worse off because of the emergency.
Two separate challenges were before the court on Tuesday, but the justices spent most of their time and energy on the first case, which is known as Biden v. Nebraska and was filed by six states with Republican attorneys general.
The states’ challengeThe justices will reach the merits of the states’ claims only if they first agree with the U.S. Court of Appeals for the 8th Circuit that the states have a legal right to sue, known as standing. The states’ primary argument is that Missouri has standing because it created and controls the Missouri Higher Education Loan Authority, one of the largest holders and servicers of student loans in the United States. The loan-forgiveness program, Nebraska Solicitor General James Campbell told the justices, “threatens to cut MOHELA’s” funding by nearly 40%. Because all funds beyond operating revenues go to support student financial aid in Missouri, Campbell emphasized, a reduction in MOHELA’s revenues will mean less money for financial aid in Missouri.
Representing the Biden administration, U.S. Solicitor General Elizabeth Prelogar told the justices that even if MOHELA might be harmed by the loan-forgiveness program, that would not be enough for Missouri to bring a lawsuit.
The court’s liberal justices appeared sympathetic. Justice Elena Kagan agreed that MOHELA might have a right to sue – but, she noted, it hasn’t done so. Normally, Kagan noted, you can’t sue on someone else’s behalf, which would preclude a lawsuit by Missouri. And indeed, she added, Missouri has derived substantial benefits from creating MOHELA as an independent entity.
Justice Sonia Sotomayor echoed Kagan’s concerns. It’s “hard to imagine how … Missouri can claim an injury” when MOHELA is a separate entity, independent from the state.
And Justice Ketanji Brown Jackson raised a broader question. Noting that in his opening statement Campbell had accused the Biden administration of trying to bypass Congress “on one of today’s most debated policy questions,” she countered that the justices “have to be concerned about jumping into the political fray” unless they’re doing so in a case in which someone has standing.
But Justice Samuel Alito appeared unconvinced. For purposes of standing, he asked Prelogar, has the Supreme Court ever decided whether an entity like MOHELA is part of the state?
If the court’s liberal justices were dubious about the states’ right to sue, the court’s conservative justices appeared just as skeptical about whether the Biden administration could rely on the HEROES Act to adopt the loan-forgiveness program.
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https://www.scotusblog.com/2023/02/bidens-student-loan-forgiveness-plan-gets-cold-reception-from-conservative-justices/