By Matthew Vadum | June 30, 2023 | The Epoch Times
The Supreme Court voted 6–3 on June 30 to strike down President Joe Biden’s controversial plan to partially forgive student loans.
The six conservative justices voted to invalidate the program in the closely watched case, while the three liberal justices voted to uphold it.
Biden unveiled the plan in August 2022 in a move critics decried as a constitutionally dubious attempt to help Democrats in November 2022 congressional elections. The Congressional Budget Office said the plan could cost about $400 billion, but the Wharton School estimates the price tag could blow past $1 trillion.
The now-invalidated program would have canceled as much as $20,000 in loan principal for each of 40 million borrowers.
Biden denounced the ruling during a late afternoon presser at the White House hours after the decision was released.
There are “millions of Americans in this country who feel disappointed and discouraged or even a little bit angry about the court’s decision today on student debt.”
Sixteen million people had been approved for debt relief and “the money was literally about to go out the door. And then Republican elected officials and special interests stepped in.”
“They said no, no—literally snatching from the hands of millions of Americans thousands of dollars in student debt relief that was about to change their lives,” the president said.
“Today’s decision has closed one path and now we’re going to pursue another,” he said, promising to provide further student loan relief.
On Feb. 28, the Supreme Court heard two related cases back-to-back dealing with the program, Biden v. Nebraska (court file 22-506) and Department of Education v. Brown (court file 22-535).
The Biden v. Nebraska appeal springs from a lawsuit Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina brought against the federal government.
The other appeal arises from a lawsuit filed by two borrowers who say the department improperly denied them the opportunity to participate in the public commenting process and that they would have urged the agency to provide greater debt relief.
In Biden v. Nebraska, Chief Justice John Roberts wrote the court’s majority opinion (pdf). It was joined by Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett.
“Last year, the Secretary of Education established the first comprehensive student loan forgiveness program, invoking the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) for authority to do so.
“The Secretary’s plan canceled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600. … Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”
“The secretary’s plan has ‘modified’ the cited provisions [in the statute] 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,” Roberts said, paraphrasing a comment he made during oral arguments on Feb. 28.
“From a few narrowly delineated situations specified by Congress, the secretary has expanded forgiveness to nearly every borrower in the country,” the chief justice added.
The “economic and political significance” of the action by the secretary, who “claims the authority to exercise control over ‘a significant portion of the American economy,’” is “staggering by any measure. … Practically every student borrower benefits, regardless of circumstances.”
The loan forgiveness plan would have “ten times the ‘economic impact’ that we found significant in concluding that an eviction moratorium implemented by the Centers for Disease Control and Prevention triggered analysis under the major questions doctrine,” Roberts wrote.
Under the major questions doctrine, when interpreting statutes courts will presume that Congress is not delegating issues of major economic or political significance to executive agencies such as the Department of Education unless it says so. Conservatives favor the doctrine as a way of reining in the administrative state and an executive branch that in their view has too much power.
The Supreme Court reversed the judgment of the U.S. District Court for the Eastern District of Missouri and remanded the case “for further proceedings consistent with this opinion.”
Justice Barrett filed a 16-page concurring opinion.
“The major questions doctrine has an important role to play when courts review agency action of vast ‘economic and political significance,’” she wrote, citing a previous precedent.
“But the doctrine should not be taken for more than it is— the familiar principle that we do not interpret a statute for all it is worth when a reasonable person would not read it that way.”
Justice Elena Kagan wrote a 30-page opinion dissenting from the majority in Biden v. Nebraska. The opinion was joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.
The majority invoked the “made-up major questions doctrine to jettison the Secretary’s loan forgiveness plan.”
“Small wonder the majority invokes the doctrine,” Kagan wrote.
“The majority’s ‘normal’ statutory interpretation cannot sustain its decision. The statute, read as written, gives the Secretary broad authority to relieve a national emergency’s effect on borrowers’ ability to repay their student loans.
“The Secretary did no more than use that lawfully delegated authority. So the majority applies a rule specially crafted to kill significant regulatory action, by requiring Congress to delegate not just clearly but also micro-specifically.”
In the other case, Department of Education v. Brown, Justice Samuel Alito wrote the court’s unanimous decision (pdf) that threw out the two borrowers’ claim over a lack of legal standing.
These borrowers who did not qualify for maximum relief had argued that the department failed to follow “mandatory procedures known as (1) negotiated rulemaking and (2) notice and comment.”
The borrowers “do not want debt forgiveness under the HEROES Act, which they claim is unlawful. They want debt forgiveness under the [Higher Education Act of 1965].
But “[n]othing the Secretary has done deprives them of a ‘chance’ to seek that result. Because respondents cannot meaningfully connect the absence of loan relief under the HEA to the adoption of the [debt relief] Plan, they have failed to show that their injury is fairly traceable to the Plan.”
Because the respondents lack standing, the Supreme Court vacated the judgment of the U.S. District Court for the Northern District of Texas and remanded the case “with instructions to dismiss.”
The loan forgiveness program was justified by reference to the twin emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus. The national emergency and the public health emergency enabled federal agencies to exercise expansive powers in managing the government’s pandemic response but on May 11 Biden ended those emergencies.
The Biden administration separately put a pause on student loan payments and interest during the recent pandemic at an estimated cost of $100 billion but then claimed last year that the pandemic gave it emergency authority under the law to proceed with partial loan forgiveness.
The pause expires in the fall. Interest restarts in September and loan payments resume in October, according to the government. About 26 million people reportedly applied under the program before courts blocked it last year. Of that total, 16 million are said to have been approved before the government stopped accepting applications.
The U.S. Department of Education claimed authority under the HEROES Act to move forward with debt relief on an emergency basis.
But lawmakers involved in the passage of the HEROES Act have said it was enacted after the 9/11 terror attacks to provide student loan relief to military service members and their families, not to cancel debts en masse.
The original version of the legislation in 2001 allowed the department to grant debt relief as a result of a “national emergency” related to a “terrorist attack,” but the 2003 version removed the “terrorist attack” qualifier.
Biden vetoed a congressional measure earlier this month that sought to block the program, which is premised on twin emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus.
Nebraska Attorney General Mike Hilgers, a Republican, hailed the Supreme Court’s ruling in Biden v. Nebraska.
The ruling has “stopped the Biden Administration’s breathtaking attempt to grab power … [and is] a timely reminder that the President is no king,” he said in a statement.
“He must work with, and not around, Congress. The Supreme Court has reaffirmed the separation of powers principle that has been in place since our country’s founding, and one which has helped preserve freedom for nearly 250 years. And as a result of today’s decision, taxpayers have been saved nearly $500 billion.”
Abby Shafroth of the National Consumer Law Center said the decision was “deeply disappointing.”
“It is wrong on the law and threatens the financial security of millions of low-income Americans who are struggling with unaffordable student loan debt.”
The court’s conservative majority “broke from existing precedent and well-established limits on the Court’s authority to allow these cases to proceed” and then “pushed aside the plain language of the law authorizing the debt relief program to invent from thin air new limits on the Secretary of Education’s authority to protect borrowers in the event of national emergencies.”