It's Debatable: Was Supreme Court right to strike down Biden student-loan plan?

In this week's "It's Debatable" segment, Rick Rosen and Charles Moster debate whether the U.S. Supreme Court, in Biden v. Nebraska, misinterpreted the Constitution in striking down President Biden’s student-loan cancellation plan. Rosen is the Glenn D. West Endowed Research Professor of Law at the Texas Tech University School of Law and a retired U.S. Army colonel. Moster is founder of the Moster Law Firm based in Lubbock with seven offices including Austin, Dallas, and Houston. Whether the Supreme Court, in Biden v. Nebraska, Misinterpreted the Constitution in Striking Down President Biden’s Student-Loan Cancellation Plan

ROSEN # 1

Last August, President Biden and his Secretary of Education cancelled $430 billion of student debt, invoking as authority the Higher Education Relief Opportunities for Students Act of 2003 (“HEROES Act”). Primarily intended to shelter military personnel unable to pay their student loans, the Act affords limited protection to others “who suffer direct economic hardship as a direct result of … national emergency.” Biden asserted the COVID-19 pandemic as the national emergency, although he declared the emergency over just weeks later.

On June 30, in Biden v. Nebraska, the Supreme Court correctly held the President and his Education Secretary exceeded their power under the Act. The Court stated that “[t]he question here is not whether something should be done; it is who has the authority to do it.” The Court relied upon the “major question doctrine,” a statutory interpretive tool reflecting “common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency.” “The Secretary assert[ed] that the HEROES Act grants him the authority to cancel $430 billion of student loan principal,” but the Court ruled that it “does not.” It decided that “the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to [federal] financial assistance programs … , not to rewrite that statute from the ground up.” The Court found that “[t]he Secretary’s plan has ‘modified’ the provisions only in the same sense that the French Revolution ‘modified’ the status of the French nobility—it abolished them and supplanted them with a new regime entirely.”

Key evidence of Congress’ intent is its unswerving rejection of student-loan forgiveness proposals. Under the Constitution’s Appropriations Clause the nation’s spending power is Congress’s alone. The President does not share the authority. The appropriations power is the cornerstone of representative democracy. The English Parliament employed the power of the purse to subdue the monarchy, and our Founders uniformly recognized congressional primacy over the nation’s purse. In this case, the Court found that the Executive was “seizing the power of the Legislature.” The assertion of administrative authority conveniently enabled the Administration “to enact a program that Congress has chosen not to enact itself.”

In early June, Congress passed a resolution blocking the President’s cancellation of student loans, which the President promptly vetoed. The veto turned the Appropriations Clause on its head. Congress flatly disapproved wholesale loan forgiveness; however, by the Administration’s reasoning, any president—relying on the flimsiest statutory authority and ignoring the absence of a congressional appropriation—can expend federal funds and shield the unlawful expenditure by retaining the support of just over one-third of the members of either congressional house. Fortunately, the Supreme Court foreclosed this possibility in Biden v. Nebraska.

MOSTER # 1

I have every reason to applaud the decision of the US Supreme Court in rejecting President Biden's loan forgiveness program. After all, I had to pay back tens of thousands of dollars to lenders to finance my graduate and law degree which impaired my standard of living for many years. For the record, I paid back every penny with interest. I understood when I took out these

loans that it was my obligation to repay the opportunity presented to me as I would not have been able to pursue my current profession without financial assistance.

Similarly, I have occasional displeasure with millennials who think they can get something for nothing. Emblematic of that, of course, is what Biden and the Secretary of Education attempted to do with loan forgiveness.

That said, as a lawyer practicing in the area of constitutional law among others, I am again horrified by what this runaway Supreme Court is doing to our established precedent in the United States. It has pursued a partisan agenda which in large measure I agree with but cannot countenance as it upends the fundamental principle of stare decisis which means that precedent must be followed in addition to a proper contractual analysis which is mindful of the separation of powers between the judicial branch and the legislative/executive.

Justice Kagan in her dissent sets forth the sound constitutional and statutory basis for negating the majority decision which simply pursues a parochial agenda. Contrary to what Rick is suggesting, any reading of contractual interpretation in litigation buttresses what the Secretary of Education did in justifying the decision to extend the Covid national emergency to loan forgiveness. A reasonable reading of the statute endorses that, in my opinion, and that of Justice Kagan.

As President Biden has suggested on more than one occasion, this is not a "normal Court". As our readers know, I am not a fan of President Biden, but I agree with him on this.

My concern is that if we allow this Supreme Court to overturn precedent willy-nilly based on a conservative agenda, what will happen when the pendulum ultimately swings to a liberal majority that will do exactly the same thing? The Supreme Court must provide reasoned decisions based on sound judgment and precedent. In the absence of that, our highest tribunal becomes simply a kangaroo court with no public support or legitimization. That's with this decision accomplishes and I am adamantly opposed to it.

ROSEN # 2

In 2021, both President Biden and House Speaker Nancy Pelosi recognized that the President did not have the authority to cancel student loans. In February, President Biden spoke about “writing off” $10,000 of student loans. White House officials “interpreted” Biden’s remarks to mean that they were not “a descriptor for executive action but to reflect his endorsement of achieving that goal through legislation.” In July, Pelosi emphasized the need for congressional action: “People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”

In August 2022, the President announced his plan to forgive up to $20,000 of student debt under the HEROES Act. The Act limits relief to those suffering “direct economic hardship” as a “direct result” of a national emergency. Just weeks later, however, Biden declared the national emergency—the COVID pandemic—to be over, and he steadfastly touted the strength of the nation’s economy, particularly its low unemployment. Thus, there was neither a national emergency nor an economy that adversely affected the ability to repay student loans.

Biden blamed Republicans for upsetting his loan-repayment program. Really? Until January 2023, Democrats controlled Congress. They could have enacted debt-relief. They failed to do so. It’s not as if the Democrats were reluctant to spend money: they appropriated trillions for all sorts of programs, but not student-debt relief.

President Biden and Charles refer to the Court as “not normal.” Charles accuses the Court of “overturning precedent willy-nilly based on a conservative agenda.” But there is no precedent supporting Biden’s debt-cancellation plan. The decision is analogous to Youngstown Sheet & Tube v. Sawyer, in which the Court enjoined President Truman’s seizure of the nation’s steel plants during the Korean War. Truman believed an impending labor strike might imperil the nation’s ability to sustain its military operations in Korea; however, Congress refused to give Truman the power he exercised. In his influential concurring opinion, Justice Robert Jackson categorized presidential power noting that “[w]hen the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for he can rely only upon his own constitutional powers minus any constitutional powers of Congress.” In this case, the President had no independent constitutional authority to forgive $430 billion in federal student loans—only Congress had such power, and it refused to exercise it.

MOSTER # 2

Once again, I am in the unenviable position of defending a presidential directive and agency action which does not comport with my personal values. Although I find it reprehensible that students were given a “free ride” by Mr. Biden and the Secretary of Education, such action is permissible under our separation of powers doctrine.

As Justice Kagan made clear in her dissent, it is not the job of the Supreme Court to act as an arbiter of public disputes which are delegated to the “peoples’” representatives in our Congress and the executive branch. They are held accountable for their decisions, right or wrong, by the voters on election day.

Conversely, the Justices of the Supreme Court are appointed and serve a life tenure without any public accountability. Consequently, it is proper for the Court to refrain from making public policy decisions. As Justice Kagan framed the issue, “The Majority overrides the combined judgment of the legislative and executive branches with the consequences of eliminating loan forgiveness for 43 million Americans.”

Rick’s comparison of the broad authority delegated to the Secretary of Education under the HEROES Act to Truman’s seizure of the steel industry to avert a nationwide strike is inapposite. The Supreme Court in the decision, Youngstown Sheet & Tube v. Sawyer (1952), correctly struck down Truman’s abuse of executive authority as violative of the separation of powers doctrine of the Constitution. Such was not the case with regard to the forgiveness of student loans under the broad statutory authority conferred by Congress to the Department of Education in dealing with national emergencies. Although one could quibble with the legislative intent behind the meanings of the terms “modify” and “waiver” as utilized in the legislation, it pales in comparison to the abuse of executive power employed by Truman.

Justice Kagan also correctly determined that the Court’s decision upended decades of precedent which upheld and expanded the discretion of agencies to broadly administer legislative mandates such as the HEROES Act. Heretofore, the Court has refused to micromanage the executive branch in carrying out its responsibilities in that agency decision makers are in the best position to understand the myriad of

factors which influence the implementation of public policy. It is wholly improper, irrational, and unconstitutional to delegate that power to an unaccountable judiciary. As stated in the dissent, “The statute…gives the Secretary broad authority to relieve a national emergency’s effect on borrowers’ ability to repay their student loans. The Secretary did no more than use that lawfully delegated authority. So, the Majority applies a rule specifically crafted to kill significant regulatory action by requiring Congress to delegate not just clearly but microscopically.”

Although I am personally opposed to the forgiveness of a single dime owed by a mostly entitled generation, I stand by a proper interpretation of the Constitution and its separation of powers.

This article originally appeared on Lubbock Avalanche-Journal: It's Debatable was SCOTUS right to strike down Biden student loan plan