Conservative Justices Appear Ready To Scrap Biden's Student Loan Plan — But It Might Survive Because Of Standing

If two Republican-appointed justices find that the plaintiffs have no standing to sue, student loan relief for 40 million Americans might yet survive.

The Supreme Court’s conservative justices looked ready to void President Joe Biden’s targeted student loan relief plan during arguments on Tuesday, although the debt relief could live on if two conservatives side with the liberal justices and deny the plaintiffs standing to sue.

At least five of the six conservative justices appeared skeptical of arguments made by Solicitor General Elizabeth Prelogar that the student loan relief program was legal. They questioned Secretary of Education Miguel Cardona’s authority under the HEROES Act to cancel student loan debt and implied that such an action violated the court’s so-called major questions doctrine, which forbids executive regulatory actions of “vast economic or political significance” that were not expressly authorized by Congress.

The only seeming hope for the more than 40 million student loan borrowers scheduled for up to $20,000 in debt relief is for the court to deny standing to the six states and two individuals suing to block the program. The court’s three liberal justices were clearly opposed to granting the plaintiffs standing, while conservative Justice Amy Coney Barrett appeared highly skeptical of standing arguments made by the states.

In questioning the legality of the student loan program, conservative justices first focused on the definitions of the words “waive” and “modify” in the 2003 HEROES Act, the law used to authorize the program. That law enables the secretary of education to “waive or modify” elements of federal student loan debts during a declared national emergency. Conservatives questioned whether the program’s cancellation of up to $20,000 in debt exceeded the definition of “waive” or “modify.”

At least one prior court definition of “modify” suggested only moderate change, Chief Justice John Roberts pointed out.

“It might be good English to say that the French Revolution ‘modified’ the status of the French nobility, but only because there is a figure of speech called understatement and a literary device known as sarcasm,” Roberts said, quoting from a prior opinion by the late Justice Antonin Scalia.

“We’re talking about half a trillion dollars and 43 million Americans,” Roberts added. “How does that fit under the normal understanding of ‘modify?’”

Instead of a waiver or modification, the program amounted to a “grant” that should have gone through the congressional appropriations process, Justice Clarence Thomas argued, citing friend-of-the-court briefs submitted by opponents of the program.

Prelogar countered these questions by noting that the HEROES Act authorizes any modification or waiver of elements of federal student loan debt and that the cancellation of debt simply amounted to both a waiver and modification of the terms of eligible loans. And since no money is pulled from the Treasury, the program does not run afoul of the Constitution’s Appropriations Clause, she said.

Sen. Bernie Sanders (I-Vt.) and others rallied outside the Supreme Court in support of the Biden administration's student loan debt relief plan.
Sen. Bernie Sanders (I-Vt.) and others rallied outside the Supreme Court in support of the Biden administration's student loan debt relief plan.
Jemal Countess via Getty Images

The conservative justices also took aim at the program for violating the court’s major questions doctrine. They asked how it could be possible for such a large program with a cost of $500 billion to not constitute a major question of “vast economic or political significance.”

“This case presents serious questions ― serious enough for the major questions doctrine,” Roberts said.

In a world where there was no major questions doctrine, wouldn’t Congress “regard it as a major question?” Justice Samuel Alito asked.

“In a colloquial sense you could say this is a major policy,” Prelogar responded, but not a “major question.” As a benefits program and not a regulatory decision, this program does not qualify for the court’s major questions doctrine, she said.

Previous invocations of the major questions doctrine featured regulatory rulings issued by executive agencies with the justification of broad, non-specific congressional authorizations like the regulation of greenhouse gas emissions at power plants or the mandate of COVID-19 vaccines for employees of big companies. The Supreme Court struck down both actions.

“This is not an assertion of regulatory authority at all,” Prelogar said. “This is the assertion of a benefits program.”

On standing, Prelogar argued that none of the six states can show actual harm or injury caused by the program that would give them standing to sue. The two individuals’ arguments for standing ― that they did not receive enough benefit from the program and therefore no one else should receive any benefit at all ― were deemed “totally illogical” by Justice Sonia Sotomayor.

Most of the arguments over standing revolved around Missouri’s claim, as it was the only state granted standing in the appeals court decision preceding the Supreme Court arguments. The other five states are Arkansas, Iowa, Kansas, Nebraska and South Carolina.

Missouri argues that the student loan relief plan would harm the state-created student loan servicer MOHELA because it holds a number of direct loans that would be forgiven. While MOHELA is a separate corporate entity from the state, Missouri claims it would harm the state because MOHELA is supposed to contribute money to a state capital improvements fund.

But as Prelogar and the liberal justices noted, MOHELA is a separate entity from the state of Missouri with its own right to sue and be sued. Missouri created MOHELA in order to separate its finances entirely from the state and, therefore, any harm to MOHELA’s income or assets would affect MOHELA and not the state.

If MOHELA were to bring suit, it would have standing to sue, Prelogar stated, but it did not. It would be “really anomalous” for the court to “overrule” Missouri’s decision to separate itself and MOHELA in order to find standing for the state, she added.

Liberal justices clearly took up this position as they questioned Nebraska Solicitor James Campbell.

Justice Amy Coney Barrett was the lone conservative to question the state plaintiffs over their standing to bring a suit in the student loan case.
Justice Amy Coney Barrett was the lone conservative to question the state plaintiffs over their standing to bring a suit in the student loan case.

“Usually we don’t allow one person to step into another’s shoes and say ‘I think that person suffered a harm’ even if the harm is very great,” Justice Elena Kagan said. “We leave it to the person, him or her or itself, to make that judgment.”

The liberal justices also zeroed in on the secondary argument that harms to MOHELA’s finances could impact its contributions to a state capital improvements fund and, thus, hurt the state. They pointed out that MOHELA has not contributed to the fund in 15 years, and Justice Ketanji Brown Jackson got Campbell to admit that the state has no existing plans for the fund.

The most notable questions on standing, though, came from Barrett. She repeatedly pressed Campbell about why the state brought this lawsuit and not MOHELA. Since the state has authority over MOHELA, it has the right to sue on its behalf, Campbell argued.

“Why didn’t the state just make MOHELA come then?” Barrett countered, noting the solicitor general had conceded MOHELA would have standing to sue. “If MOHELA’s an arm of the state, why didn’t you just strong-arm MOHELA and say you’ve got to pursue this suit?”

Campbell simply dismissed it as a “question of state politics.”

Barrett was the only conservative justice who openly questioned the plaintiffs’ standing. Among the others, Alito openly stated his belief that they deserved standing. The other four ― Roberts, Thomas, Neil Gorsuch and Brett Kavanaugh ― were silent on the matter.

With at least five conservative justices hostile to the program on its merits, the only hope for the program is that Barrett and one other conservative justice join the liberals to deny standing. The 40 million-plus borrowers who are eligible for debt relief will just have to wait for the court to decide their fates.

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