On Student Loan Forgiveness, Conservative Justices Skeptical of Biden Plan

Photo for The Washington Post by Sarah Silbiger
Sen. Bernie Sanders (I-Vt.) speaks at a rally outside the Supreme Court in support of student debt forgiveness as the justices heard arguments about the Biden administration’s proposed program.

WASHINGTON – Conservative Supreme Court justices on Tuesday seemed highly skeptical that President Biden has authority from Congress to provide more than $400 billion in student loan forgiveness to tens of millions of borrowers as a result of the coronavirus pandemic.

During more than three hours of argument about one of the president’s most sweeping and expensive domestic initiatives, conservatives led by Chief Justice John G. Roberts Jr. questioned how what Roberts repeatedly called a “half-trillion dollar” program could be implemented without more direct involvement from Congress, which controls the purse of federal spending.

“We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Roberts said, adding that “this is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that.”

The justices on the right – six of the court’s nine members – seemed unsatisfied with assertions from their liberal colleagues and U.S. Solicitor General Elizabeth B. Prelogar that blocking the program would actually thwart the will of Congress, which in 2003 provided authority for the secretary of education to “waive or modify” student loan provisions in times of emergency.

Liberal Justice Elena Kagan said Congress could not have been clearer about its intentions in the Higher Education Relief Opportunities for Students Act. “We deal with congressional statutes every day that are really confusing,” Kagan said. “This one is not.”

But the conservative justices asked a barrage of questions about the ability of the executive branch to make sweeping change without specific congressional authorization – the “major questions doctrine.” By the end of the day, the administration’s best hope seemed to be that the court might find that none of the plaintiffs in the two cases had legal standing to make the challenge.

Such a finding would mean the court would not decide the merits of the issue. Conservative Justice Amy Coney Barrett had skeptical questions for lawyers representing six Republican-led states in one case, and two borrowers who did not receive the relief they wanted in the other. But it would require only five justices to find standing in one of the cases for a challenge to proceed.

Prelogar found little support among the conservatives for her contention that the administration was properly exercising the authority Congress had already bestowed.

Said Roberts: “I think most casual observers would say 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.”

Justice Clarence Thomas suggested that the words “waive” and “modify” in the HEROES Act stop well short of completely canceling a borrower’s debt. Justice Brett M. Kavanaugh said: “Some of the biggest mistakes in the court’s history were deferring to assertions of executive emergency power. Some of the finest moments in the court’s history were pushing back against presidential assertions of emergency power.”

Prelogar argued that the court’s most recent crackdowns on the executive branch involved regulations from federal agencies. Extending benefits, as the loan forgiveness program does, is different, she said.

Justice Samuel A. Alito Jr. pushed back on that: “Drawing a distinction between benefits programs and other programs seems to presume that when it comes to the administration of benefits programs, a trillion dollars here, a trillion dollars there, it doesn’t really make that much difference to Congress.”

Roberts, Alito and Justice Neil M. Gorsuch also pressed Prelogar on whether the loan forgiveness program was fair: to those who have paid off their loans, those who financed college without debt or those who decided not to go to college because of the cost. Roberts presented a hypothetical scenario involving two high school graduates – one who takes out a loan to attend college and the other who gets a loan to start a lawn-care business.

Why is it fair, he asked Prelogar, to require the owner of the lawn service to essentially subsidize through tax payments loan forgiveness for the college graduate, who studies show will earn more money?

“Nobody’s telling the person who is trying to set up the lawn service business that he doesn’t have to pay his loan,” Roberts said.

Alito added, “Why was it fair to the people who didn’t get arguably comparable relief?”

Prelogar, again supported by the court’s trio of liberal justices, said that is what Congress authorized – a law that referred specifically to student loan borrowers, not those who chose to start a business or forgo college because of the cost. Congress might have other programs that benefit those people, Kagan said.

Prelogar said that the fairness argument goes both ways, and that relief is being held up by states that are not injured by the program and two borrowers who want to end it rather than benefit from it.

“Already, 26 million people have applied for this relief, and 16 million people have been approved to receive it,” she said. “For those Americans, this is a critical lifeline to ensure that they are not subject to the severe negative consequences of delinquency and default on student loan debt.”

Justice Sonia Sotomayor agreed that the law empowers the education secretary to make sure borrowers were not worse off, in the terms the law uses, because of an emergency.

“The evidence is clear that many” borrowers will default, Sotomayor told Nebraska Solicitor General James A. Campbell, who argued for the states. “Their financial situation will be even worse because once you default, the hardship on you is exponentially greater. You can’t get credit. You’re going to pay higher prices for things. They are going to continue to suffer from this pandemic in a way that the general population doesn’t. And what you’re saying is, now we’re going to give judges the right to decide how much aid to give them.”

Education Secretary Miguel Cardona’s proposed plan would affect more than 40 million borrowers, about half of whom would see their balances wiped clean. It would eliminate up to $10,000 of student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Those who received Pell grants, a form of financial aid for low- and middle-income students, are eligible for an additional $10,000 in forgiveness.

Prelogar noted that for the last three years, starting in the Trump administration, borrowers have not had to make their payments under the same emergency powers Cardona used. No one has objected to such “forbearance,” she said, although “it’s currently costing the federal government more per year than this loan forgiveness plan would cost the government annually.”

To have legal standing to show harm and challenge a program, plaintiffs must show they have suffered a specific, rather than generalized, injury that can be remedied by relief from a federal court. In this case, it is not enough just to object to the size of the program or even to allege that the president has exceeded his authority.

A panel of the U.S. Court of Appeals for the 8th Circuit found that the Missouri Higher Education Loan Authority, a quasi-independent entity that services loans, could suffer losses from the program change that would hurt Missouri, one of the challenger states. A different court recognized standing for two borrowers, Myra Brown, who doesn’t qualify for the program, and Alexander Taylor, who doesn’t qualify for $20,000 of forgiveness.

Prelogar strenuously objected to both of those decisions. The Missouri loan authority is independent of the state in many ways, she noted, and chose not to sue on its own. The challenges by Brown and Taylor would not benefit them, she added, but instead would ensure that no one got relief from the loan forgiveness program.

Liberal Justice Ketanji Brown Jackson agreed, voicing the opposite approach to the separation-of-powers issue that Roberts had offered. Taking seriously who can challenge an administration policy, Jackson said, allows the president and Congress “to hash this out without interference from a torrent of lawsuits brought by states and entities and individuals who don’t have a real personal stake in the outcome,” she said.

“I feel like we really do have to be concerned about jumping into the political fray, unless we are prompted to do so by a lawsuit that is brought by someone who has an actual interest.”

Although it was a popular campaign promise for Democrats, former House speaker Nancy Pelosi (D-Calif.) and even Biden have expressed doubt in the past about the president’s ability to wipe out student debt on his own.

Advocacy groups held out hope Tuesday that Barrett’s questions about whether any plaintiff had shown the proper injury to allow the suits to move forward might attract support. “The arguments showed how weak the plaintiffs’ standing claims are, and the justices seemed very skeptical,” said Persis Yu, deputy executive director and managing counsel for the Student Borrower Protection Center.

But Clark Neily, senior vice president of legal studies at the libertarian Cato Institute, found Kavanaugh’s remarks about the court pushing back against maximalist claims of presidential authority most telling.

“I don’t think it will be a sweeping decision, but I do think that the court is most likely to find that this was just a bridge too far,” he said.

The cases are Biden v. Nebraska and U.S. Department of Education v. Brown.