Biden loan-forgiveness plan rejected by Supreme Court

Separately from the states, two individual borrowers who failed to meet the qualifications for Biden’s program brought their own challenge. Myra Brown and Alexander Taylor initially brought a suit against the administration for failing to allow comments on the plan prior to its implementation, but a judge advanced the suit under Heroes Act claims. 

Justice Samuel Alito threw out this case for lacking standing Friday. 

“We hold that Brown and Taylor fail to establish that any injury they suffer from not having their loans forgiven is fairly traceable to the Plan,” Alito wrote in a short unanimous opinion. 

When the court heard both cases in February at oral arguments, the conservative majority appeared intent on striking down Biden’s plan on the merits. Less clear was whether the case could overcome standing hurdles. Missouri, one of the six states involved in the suit, presented the strongest arguments in this area because of its Missouri Higher Education Loan Authority, a government-created entity that services student loans. Complicating the state’s arguments around how Biden’s plan harmed it, however, that agency declined to participate in the case. 

The states accused Biden of abusing his emergency authority from the pandemic to accomplish a goal he would have not otherwise had the power to meet. 

“The Program places an estimated 43 million borrowers in a better position by eliminating all loan balances for 20 million and erasing up to $20,000 for over 20 million more,” James Campbell, Nebraska solicitor general, wrote in the states’ brief. “This vastly exceeds the Secretary’s authority under the Act, and the Court should affirm the Eighth Circuit’s decision to enjoin the Program.” 

Student loans have been on hold since former Education Secretary Betsy DeVos paused payments in 2020 at the direction of then-President Donald Trump. DeVos used the Heroes Act to do this, a move the Biden administration argues proves his case. 

“Congress expressly authorized the secretary to waive or modify any title for provision in emergencies to provide financial relief to borrowers,” U.S. Solicitor General Elizabeth Prelogar said during oral arguments. 

The majority relied on Missouri’s claims that standing flowed from the harm to its state-created loan servicers from Biden’s program. 

“Because we conclude that the Secretary’s plan harms MOHELA and thereby directly injures Missouri — conferring standing on that State — we need not consider the other theories of standing raised by the States,” Roberts wrote. 

Kagan said this theory allows the states to claim a third party’s injury. By allowing this scheme, Kagan argues, the majority is contravening a bedrock principle of standing law. 

“Missouri is doing just that in relying on injuries to the Missouri Higher Education Loan Authority (MOHELA), a legally and financially independent public corporation,” Kagan wrote. “And that means the Court, by deciding this case, exercises authority it does not have. It violates the Constitution.” 

Roberts ends his opinion by chastising his colleagues in the dissent for claiming the court stepped out of bounds. He argues the court is using the traditional tools of judicial decision-making. 

“Reasonable minds may disagree with our analysis — in fact, at least three do,” Roberts 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.” 

Kagan said the education secretary was acting within his statutory emergency powers granted by Congress in forgiving student debt. 

By concluding the contrary, Kagan said the majority has moved the posts on how presidents can use their authority. 

“Today’s decision thus moves the goalposts for triggering the major-questions doctrine,” Kagan wrote. “Who knows — by next year, the Secretary of Health and Human Services may be found unable to implement the Medicare program under a broad delegation because of his actions’ (enormous) ‘economic impact.’” 

Advocacy groups criticized the ruling as further evidence of how out of step the majority is with the American public. 

“This wrongheaded decision is a devastating blow to the more than 43 million Americans who were promised relief and are now let down by a court gone rogue,” Analilia Mejia, co-executive director at the Center for Popular Democracy Action, said in a statement. “It’s time now for President Biden to swiftly implement a Plan B, utilizing the Higher Education Act, which grants the Secretary of Education the authority to compromise and settle debts.” 

The Student Borrower Protection Center called the ruling a win for the wealthy and powerful at the expense of those who most need the government’s assistance. 

“This court will go down in history as one dedicated to expanding the rights of powerful special interests while stripping rights away from everyone else,” Mike Pierce, executive director of that center, said in a statement. 

Follow @KelseyReichmann

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