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The Supreme Court will have until June 2023 to determine the legality of President Joe Biden’s student loan relief plan after hearing arguments in two cases that challenge the plan. The justices will rule on the authoritative scope of the U.S. Department of Education and evaluate whether states challenging the relief plan have the legal right to file a lawsuit.

Here’s a breakdown of the arguments ahead of the Court’s imminent ruling both on the DOE’s authority to forgive loans and the challenging states’ right to sue.

President Biden in August 2022 announced the plan to cancel up to $400 billion in student loan debt, which he pushed for during his presidential campaign leading up to the 2020 presidential election. On Feb. 28, the Supreme Court heard two separate challenges to Biden’s plan in Biden v. Nebraska and Department of Education v. Brown, both of which challenge the scope of the Higher Education Relief Opportunities for Students Act.

The case DOE v. Brown, which involves two student-loan borrowers who did not qualify for maximum forgiveness, questions whether U.S. Secretary of Education Miguel Cardona possesses the legal authority to enact the program. The Biden Administration employed the Higher Education Relief Opportunities for Students Act of 2003, which outlines the Secretary of Education’s powers in a national emergency.

The HEROES Act states Cardona has the discretion to waive or modify any regulation to student financial assistance programs “as deemed necessary” as long as the changes occur under specific criteria listed in the law, such as if a person “resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency.”

In March 2020, then-President Donald Trump declared a national emergency at the beginning of the COVID-19 pandemic. Biden then extended the emergency declaration in February 2022 to last until February 2023.

The Biden Administration now argues that the extension of the emergency declaration holds grounds for student loan forgiveness.

Bridget Overby | Designer Editor

The other case which saw oral arguments, Biden v. Nebraska, is a challenge by six Republican-led states, including Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. The challenge debates whether the relief plan exceeds the Secretary of Education’s statutory authority and if six states have the right to sue over potential financial harm towards the Higher Education Loan Authority of the State of Missouri.

During her opening statement in the hearing for Biden v. Nebraska, U.S. Solicitor General Elizabeth Prelogar, who represented the Biden Administration, claimed that Congress authorized Cardona to waive any title for provision in emergencies to provide financial relief to borrowers, according to the HEROES Act.

“The secretary acted within the heartland of his authority and in line with the central purpose of the HEROES Act in providing that relief here,” Prelogar said at the hearing.

The Supreme Court’s conservative judges referenced the major questions doctrine — which states that cases of “vast economic or political significance” must be authorized by Congress — in their skepticism of the plan. During oral arguments, Chief Justice John G. Roberts Jr. said that the student loan relief policy enacted via congressional legislation would be more representative of public interest than a decision from Cardona alone.

“I think most casual observers would say that if you’re going to give up that much amount of money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on,” Roberts said in the DOE v. Brown hearing.

Roberts also contended that because Congress has not previously taken legislative action on loan relief, the administration should not take action on student loans without congressional approval.

During the DOE v. Brown hearing, Prelogar pushed back with the assertion that the HEROES Act was specifically designed for situations like the COVID-19 pandemic, which hinder borrowers’ ability to make payments. On Jan. 11, the Constitutional Accountability Center submitted an amicus brief, which argued that the COVID-19 pandemic made economic struggles for low and middle income Americans worse.

“This is Congress telling the Secretary ‘you don’t have to let that happen,’ and when we have this kind of a pandemic that requires this kind of relief, I think that the HEROES Act is operating right within its domain,” Prelogar said in the DOE v. Brown hearing.

Following the arguments, the conservative majority is poised to reject the relief plan, based on analyses like one from The New York Times. Still, the relief plan could have a path forward if the justices find that neither of the cases’ plaintiffs established grounds to sue.

If the Supreme Court announces its final ruling before June 30, the pandemic repayment pause Biden added in the wake of the legal battle will end 6o days after the court’s decision is made, potentially impacting millions of borrowers who are approved or awaiting approval for debt relief. If the final ruling is announced after June 30, the payments will begin 60 days after June 30, regardless of the date of the final decision.

“Congress doesn’t get much clearer than that,” Justice Elena Kagan said in the Biden v. Brown hearing. “We deal with congressional statutes every day that are really confusing. This one is not.”

Published on March 21, 2023 at 12:41 am

Contact Kendall: kaluther@syr.edu