Patrick Semansky/AP Photo
Student debt relief advocates gather outside the Supreme Court in Washington, February 28, 2023.
On Tuesday, the Supreme Court heard oral arguments in two cases that could outlaw President Biden’s student debt relief program. If the Court does so, it will not only crush the hopes of 43 million borrowers, keeping many in debt servitude, unable to buy homes, start families and businesses, or save for retirement. It will also undermine the rule of law, by distorting fundamental rules on legal standing and expanding SCOTUS’s novel and unprincipled “major questions doctrine” that effectively allows judges to strike down any regulation they disagree with because they decide it’s too big.
On the latter, most of the conservative justices seemed ready to reject the administration’s debt relief on “major questions” grounds. But on the threshold subject of standing, the case was far less clear. Justice Amy Coney Barrett seemed to agree with the liberals on the Court that the plaintiffs did not have standing to sue, and most of the other conservatives were silent.
Standing
Legal standing requires that a lawsuit must be based on an actual and imminent alleged harm that is concrete and particularized to the plaintiff. You don’t have standing just because you don’t like a law.
In Department of Education v. Brown, two plaintiffs argued that they had standing because they hadn’t been given the opportunity of a notice and comment period to argue that they were entitled to debt relief. Michael Connolly, the lawyer for the plaintiffs, argued that his clients’ claim could be remedied if the Court threw out the program, because in that case the secretary of education might then consider granting the plaintiffs relief under a different program for which they would be eligible.
Justice Sonia Sotomayor called that argument “totally illogical,” because it wouldn’t give the plaintiffs any benefits, just take benefits away from other borrowers, with no guarantee of substitute benefits down the road. The liberal justices argued that it is completely speculative as to whether the secretary would later try to invoke a different program.
Justice Barrett asked whether someone who had already paid off their debt would have standing. Connolly responded that “their injuries are not redressable.” Justice Elena Kagan suggested to Connolly that, if his clients want relief, they could ask Congress to pass a new law, because under existing law, Congress eliminated the normal regulatory procedures to cancel debt in an emergency situation, including the notice of proposed rulemaking and public comment phases. Indeed, even the district judge who ruled for the plaintiffs in Brown admitted in his own opinion that the HEROES Act, which is being used as the mechanism for debt relief, enables the education secretary to waive the notice and comment period.
In the other case, Biden v. Nebraska, Missouri and several other states argue they have standing because an independent loan servicer, the Missouri Higher Education Loan Authority (“MOHELA”), would lose money because it couldn’t service as many loans. But MOHELA isn’t, and doesn’t want to be, a plaintiff. In a letter to Rep. Cori Bush (D-MO), an official for the loan servicer stated, “MOHELA’s executives were not involved with the decision” to file a lawsuit.
The original district court judge in Biden v. Nebraska ruled that “[b]ecause Plaintiff States … have failed to establish Article III standing, the Court lacks jurisdiction to hear this case.” That was overruled by a three-judge panel of Republican-appointed judges for the Eighth Circuit, two of whom are contributors to the Federalist Society and one of whom was rated not qualified by the American Bar Association, because his “passionately-held social agenda appeared to overwhelm and obscure the ability to exercise dispassionate and unbiased judgment.”
The state plaintiffs claim standing because MOHELA makes small payments to Missouri. As the Biden administration’s brief notes, that’s like saying if A owes money to B, and B owes money to C, C has standing to sue. Meanwhile, as was mentioned in oral arguments, MOHELA hasn’t paid into the state fund at issue in the past 15 years.
Nebraska Solicitor General Jim Campbell argued that MOHELA was not a party to the case because Missouri has its own interests at stake, and has the authority to speak for MOHELA. But he had a rough time on that argument, with liberal and conservative justices alike.
Justice Barrett asked Campbell, “Why didn’t the state just make MOHELA come, then? … If MOHELA is an arm of the state, why didn’t you just strong-arm MOHELA and say you’ve got to pursue this suit?” Campbell said it was a matter of state politics. Justice Sotomayor pointed to elements of the separate financial and legal relationships between the state of Missouri and MOHELA. She said, “How can you have injury, in fact, if you immunize—you the state—have immunized yourself from any liability or injury that MOHELA could experience?”
Summarizing the Biden’s administration’s position on standing for the states, Solicitor General Elizabeth Prelogar stated, “Missouri hasn’t come forward with any allegations that MOHELA will actually … suffer financial injury under this plan. Any financial effects downstream on the state here are attenuated and speculative. So we don’t know really what the ultimate loss would be to MOHELA, even if we believe that MOHELA is part of the state.”
Mike Sacks, a legal journalist, noted that Chief Justice John Roberts has historically taken an extremely conservative view of standing, and would have to break with his previously expressed principles to grant standing to either the student debtors who wanted more relief, or the states.
Law professors Samuel L. Bray and William Baude say they are opposed to the loan forgiveness program. But they nonetheless say the Court should reject both challenges, arguing in an amicus brief that none of the plaintiffs have standing to bring the challenges. Even if the executive branch has exceeded its authority, they say in their brief, “that does not permit the judicial branch to exceed its authority.”
The Merits
The “major questions doctrine” is a previously fringe right-wing academic theory that SCOTUS only invoked for the first time in a majority opinion eight months ago. In West Virginia v. EPA, Justice Roberts ruled that a system-wide plan to decrease greenhouse gases from coal-fired power plants was such a major issue that Congress could not have intended to grant the Environmental Protection Agency such powers (despite the fact that Congress even chose to call the legislation the Environmental Protection Act, which seems to reflect Congress’s intent).
It’s a bit difficult to describe what the major questions doctrine means and what kinds of regulations it prohibits, because the EPA opinion was so general and vague. It seems to mean that if an executive agency wants to regulate a “major” issue, it must have clear and specific authorization from Congress. But Roberts never defines what constitutes a “major question,” or how specific the congressional mandate must be. That’s why Justice Kagan called the doctrine a “get-out-of-text-free card” for actions Democrats take that Roberts and his conservative colleagues oppose.
The Biden administration argues that its student debt relief plan is squarely within powers granted by Congress to the secretary of education in the HEROES Act of 2003.
That law authorizes the secretary of education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under [T]itle IV of the [Higher Education] Act [of 1965] as the Secretary deems necessary in connection with a … national emergency.”
President Trump used the HEROES Act to temporarily suspend student loan payments in 2020 and then extended that suspension twice, while President Biden extended it further six times, all in response to the pandemic. No one questioned Trump’s or Biden’s actions until Biden proposed to relieve borrowers making less than $125,000 per year of $10,000 of student debt ($20,000 for Pell grant recipients). Then, suddenly, Republicans were in an uproar and sued.
Campbell, the Nebraska solicitor general, argued on Tuesday that “the Secretary is attempting to bypass Congress on one of today’s most debated policy questions, student loan forgiveness. After many failed legislative efforts, the Secretary seeks to write off nearly a half-trillion dollars in loans for over 40 million borrowers. No statute authorizes this sweeping action.”
In contrast, Justice Kagan argued that in enacting the HEROES Act, Congress had authorized the secretary to act in just this kind of emergency situation. “We deal with statutes every day that are confusing. This one is really not,” she told Campbell.
Several conservative justices expressed concern over whether the authority to “waive or modify” any provision of the student loan law extends to complete debt cancellation. Justice Clarence Thomas said, “In other provisions, there is express language as to cancellation, and of course there isn’t here.” Prelogar responded that this was quibbling over semantics, replying that Congress “was broadly trying to cover the field” to ensure that multiple tools would be available to the education secretary.
One of the odder moments was when conservatives questioned whether giving debt relief to certain debtholders is “fair” to those not getting relief. Justice Neil Gorsuch asked about those who may have planned their lives around not seeking loans. Chief Justice Roberts seemed concerned about the fairness to people who chose not to go to college and started a lawn mowing service instead. Prelogar responded that Congress had made a judgment on the subject by authorizing student debt relief to student loan borrowers resulting from a national emergency. As an aside, Congress granted billions of dollars in pandemic relief to businesses through the Paycheck Protection Program, but no one claimed it was unlawful because it didn’t then offer economic relief to non-business owners.
On the major questions doctrine, Chief Justice Roberts said, “I think most casual observers would say if you’re going to give up that much money, if you’re going to affect the obligations of that many Americans on a subject of great controversy, they would think that’s something for Congress to act on.” Prelogar acknowledged that the action was “politically significant,” but said that was different legally than a major question. Loan forgiveness is a benefits program, not a regulation that affects personal freedom.
“To apply the major questions doctrine to override that clear text would deny borrowers critical relief that Congress authorized and the secretary [of education] deemed essential,” Prelogar concluded.
The Stakes
Forty-three million student borrowers will now have to wait several more months until SCOTUS issues its ruling to learn if they’ll receive debt relief. The Court could punt on the cases by finding that the plaintiffs lack standing, dismissing the suits without need to reach the “merits” of the plaintiffs’ claims. That may be the best possible outcome for the Biden administration. Barrett and the three liberal justices leaned strongly in that direction on Tuesday, though Chief Justice Roberts and Justice Brett Kavanaugh, seen as the other potentially gettable votes for the government, said nothing on the matter.
It’s hard to speculate on how the justices will ultimately vote just from oral arguments. But all in all, it seems more likely that the Court will have more difficulty in determining the standing question, which cuts against long-held conservative beliefs on limiting access to courts, than on the merits of the case, where they more obviously want to strike down President Biden’s program.
