Category: Must Read

Says President Biden does not have authority for his roughly $400 billion program to forgive student loan debt

WASHINGTON, D.C. (TIP): The Washington Post, the first to report on the subject, reports that the Supreme Court on Friday, June 30, said President Biden does not have authority for his roughly $400 billion program to forgive student loan debt, the latest blow from a Supreme Court that has been dismissive of this administration’s bold claims of power.

The vote was 6 to 3 along ideological lines, with Chief Justice John G. Roberts Jr. writing for the court’s dominant conservatives.

Biden contended his administration had the authority to forgive student loan debt under the Higher Education Relief Opportunities for Students Act of 2003. The law allows the education secretary to waive or modify loan provisions in response to a national emergency, such as the coronavirus pandemic. The conservative majority disagreed. “The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not,” Roberts wrote. “We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.” Roberts was joined by Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch, Brett M. Kavanaugh and Amy Coney Barrett.

The challenge brought together controversial issues: an ambitious program aimed at fulfilling a campaign promise for Biden’s political base; heightened suspicion by the Supreme Court’s conservative supermajority about the ability of federal agencies to act without specific congressional authorization; and the power of Republican-led states to use the judiciary to stop a president’s priorities before they take effect. Biden and Education Secretary Miguel Cardona proposed a plan that would eliminate up to $10,000 of student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Those who received Pell Grants, a form of financial aid for low- and middle-income students, would be eligible for an additional $10,000 in forgiveness. About 20 million borrowers could see their balances wiped clean.

U.S. Solicitor General Elizabeth B. Prelogar, who defended the program at oral arguments, said Cardona’s actions are not only justified by the law, but they are also exactly what Congress had in mind when it passed the Heroes Act in the wake of the 9/11 terrorist attacks.

In a dissent from the majority opinion, Justice Elena Kagan said the court was making national policy in place of Congress and the executive branch. “Congress authorized the forgiveness plan (among many other actions); the Secretary put it in place; and the President would have been accountable for its success or failure,” Kagan wrote, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson. “But this Court today decides that some 40 million Americans will not receive the benefits the plan provides, because (so says the Court) that assistance is too ‘significant.’ ”

Biden was expected to address the ruling later Friday.

The justices have rejected the administration’s expansive arguments in the past. The court lifted a pandemic-era moratorium on rental evictions put in place by the Centers for Disease Control and Prevention. It threw out a coronavirus vaccination-or-testing mandate imposed on large businesses by the Occupational Safety and Health Administration. And in a ruling unrelated to the pandemic, it cited the “major questions” doctrine to limit the Environmental Protection Agency’s options for combating climate change.

The challenge to the student loan program was brought by Republican-led states in one case, and two individuals from Texas in another. In both cases, the Justice Department questioned whether the plaintiffs had legal standing to file their suits. The court dismissed the challenge from Texas, but said Missouri had standing to bring the case because of a state-created organization that deals with student loans. Kagan said that her conservative colleagues strained to find a way to vote against Biden’s plan.

“In adjudicating Missouri’s claim, the majority reaches out to decide a matter it has no business deciding,” she wrote. “It blows through a constitutional guardrail intended to keep courts acting like courts.”

Roberts seemed sensitive to the criticism.

“It has become a disturbing feature of some recent opinions to criticize the decisions with which they disagree as going beyond the proper role of the judiciary,” he wrote. “We do not mistake this plainly heartfelt disagreement for disparagement. It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country.”

Roberts said the court was simply calling out the administration for taking advantage of vague language in the Heroes Act to move forward with a plan Congress likely would not authorize.

“From a few narrowly delineated situations specified by Congress, the Secretary has expanded forgiveness to nearly every borrower in the country,” Roberts wrote. “The Secretary’s plan has ‘modified’ the cited provisions only in the same sense that ‘the French Revolution ‘modified’ the status of the French nobility’—it has abolished them and supplanted them with a new regime entirely.”

The quote related to the French Revolution comes from a previous Supreme Court opinion.

Indeed, Biden and other Democratic officials themselves once questioned whether the law provided such leeway.

And Biden’s debt relief program has been a divisive issue on Capitol Hill. On June 7, Biden vetoed a Republican-led resolution to strike down the program and restart loan payments for tens of millions of borrowers. The measure passed the Senate with the backing of Sens. Joe Manchin III (D-W.Va.), Jon Tester (D-Mont.) and Kyrsten Sinema (I-Ariz.), illustrating the likely difficulty of getting any future debt relief plan through Congress.

The administration’s best hope at the Supreme Court was to convince the justices that none of the challengers had really been injured by the program, and thus they did not have legal standing to sue. Challengers had to show they have suffered a specific, rather than generalized, injury that could be remedied by relief from a federal court. It was not enough just to object to the size of the program or even to allege that the president has exceeded his authority. A panel of the U.S. Court of Appeals for the 8th Circuit had found that the Missouri Higher Education Loan Authority, a quasi-independent entity, could suffer losses from Biden’s program that would hurt Missouri, one of the challenger states. A different court said the two borrowers, Myra Brown and Alexander Taylor, had standing to proceed because Taylor doesn’t qualify for $20,000 of forgiveness, while Brown is ineligible altogether. The court unanimously dismissed the suit from the individuals, saying they did not have standing.

But Roberts said Missouri’s challenge could proceed. “The Secretary’s plan harms MOHELA in the performance of its public function and so directly harms the State that created and controls MOHELA,” he wrote. “Missouri thus has suffered an injury in fact sufficient to give it standing to challenge the Secretary’s plan.”

From the time Biden was elected, activists and some congressional Democrats have waged a relentless campaign to get him to fulfill his promise to cancel at least part of the $1.6 trillion in federal student debt.

Biden initially directed the Education and Justice Departments to produce memos on his administrative power to forgive loans but expressed skepticism. Senate Majority Leader Charles E. Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.) were adamant that Biden could use the same authority to cancel debt that President Donald Trump’s administration used to temporarily waive student loan payments during the pandemic, a pause that has been extended multiple times and remains in effect. The legal battles have left millions of student loan borrowers in limbo. More than half of eligible people had applied for the forgiveness program before it was halted by the courts, with the Education Department approving some 16 million applications.

The cases are Biden v. Nebraska and U.S. Department of Education v. Brown.