WASHINGTON (CN) — President Joe Biden’s long-awaited student loan forgiveness plan might be dead on arrival after the Supreme Court effectively hobbled the administrative state this past June when it comes to making big political and economic action without congressional authorization.
“I think when we were all considering the legality of this kind of an action, we were doing it before the EPA decision in June, and so there's been a lot of back and forth over who thinks it's legal or not but that really changed the standard,” Lanae Erikson, senior vice president for social policy, education & politics at the think tank Third Way, said in a phone interview.
Erikson was referring to West Virginia v. EPA, a case that curbed the Environmental Protection Agency's authority to regulate greenhouse gas emissions at coal-fired power plants.
Split along party lines, the conservative majority leaned on the major questions doctrine to strike down the EPA’s regulatory scheme. This doctrine says that explicit authorization from Congress is necessary if executive agencies are taking “major” actions that will have large economic and political significance.
West Virginia created this new standard, but the justices did not lay out a specific test to apply it. Experts predict that the loan forgiveness plan Biden announced Wednesday may be the first application.
The Office of Legal Counsel at the Justice Department released a memo detailing what the administration thinks is Biden’s authority to carry out this plan. While legal experts agree it will most likely be challenged in court, they are divided over its rate of survival.
“The big issue is can this be done administratively or does this require legislation,” Frederick Lawrence, a distinguished lecturer at Georgetown Law, said in a phone interview. “Everybody knows it can be done with legislation, the question is can the administration do it without additional legislative support.”
Biden is using a post-9/11 law to justify this plan. The Higher Education Relief Opportunities for Students Act of 2003 — better known as the Heroes Act — was created to give the education secretary authority to waive rules related to student financial aid programs in times of war or national emergency. Since the Covid-19 pandemic was declared a national emergency, the administration claims its student debt plan allows borrowers not to be placed in a worse position financially as a result of that emergency.
Legal experts agree that this action will have to satisfy the major questions doctrine, but they are divided on if the plan passes muster.
Some experts think the administration’s plan complies with the major questions doctrine. The Heroes Act was also used to justify pausing student loan payments. This action also paused interest on loans. Since that interest is not going to be added to loans after the national emergency, it could be seen to amount to some kind of loan forgiveness already. That action was not challenged.
“We're talking about degree not an actual change in kind,” Lawrence said. “I would understand a major question to be something that is totally different from anything that's been done before or that the legislation has provided for. So I think the administration set the better part of the argument here.”
There are other experts who question the administration’s decision to use this national emergency authorization so far into the pandemic.
“The use of the Heroes Act, which was passed after 9/11, creates the purpose in the context of what an emergency means, and I think it's a very big stretch to suggest that the world of very, very late Covid of August 2022 is anything like the world of post-9/11 or even even a couple of years after 9/11,” Jed Shugerman, a professor at Fordham Law School, said in a phone interview.