U.S. Supreme Court conservatives express skepticism over student debt relief

Mar. 1—WASHINGTON — The majority conservative wing of the U.S. Supreme Court appear skeptical that the Biden administration has the authority to implement a federal student debt relief program that was estimated to potentially aid millions of borrowers.

The conservative justices, who hold a 6-3 majority on the court, questioned whether the Department of Education could implement a program without explicit congressional approval that would cost more than $400 billion over the course of 30 years.

And they questioned the fairness of a program that would help those borrowers who qualify, but not every student loan borrower.

Chief Justice John G. Roberts Jr., along with other justices, invoked the "major questions doctrine," which holds that if the federal government is initiating a program with major national consequences, it must first clearly be approved by Congress.

Liberal justices pushed back and argued that Congress did give the Department of Education the authority to forgive federal student loan debt during a national emergency such as the coronavirus, and to act on that authority, preventing borrowers from default or a worse predicament.

The liberal justices also questioned whether the plaintiffs in the two cases that were argued even had the legal standing to sue.

On both cases, U.S. Solicitor General Elizabeth B. Prelogar — representing the Biden administration — argued that neither the states nor the two individual borrowers have legal standing.

Prelogar also argued that Congress gave the secretary of education the authority to enact this one-time relief under the Higher Education Relief Opportunities for Students Act of 2003, known as the HEROES Act, which allows for the secretary to "waive or modify any statutory or regulatory provision" to help borrowers in a national emergency.

Justice Elena Kagan, a member of the liberal wing on the court, said the language in the HEROES Act clearly gave the Biden administration the authority to act on its debt relief initiative.

The Government Accountability Office has estimated that the pause on student loan repayment has cost the federal government more than $100 billion.

However, Roberts argued the Department of Education's decision was not a modest modification, bringing up the cost factor. The Congressional Budget Office has estimated that the program would cost up to $400 billion over 30 years.

"We're talking about half a trillion dollars and 43 million Americans — how does that fit under the normal understanding of modifying?" Roberts asked.

More than 43 million Americans have student loan debt, and the Federal Reserve estimates that the total U.S. student loan debt is more than $1.76 trillion.

Justice Clarence Thomas, a conservative raised in Georgia, called the $400 billion in relief a grant, and questioned if it overrides congressional appropriations authority.

The Biden administration estimated that up to 40 million Americans would potentially qualify for the program, which would forgive up to $10,000 in federal student loan debt for single adults making under $125,000 a year, or under $250,000 for married couples. Borrowers who received Pell Grants are eligible for an additional $10,000 in forgiveness of federal student loans.

Biden v. Nebraska was filed by Republican attorney generals in Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. That suit originally argued that the Biden administration's student debt relief plan would financially harm the revenue of states that profit from federal loans, if those borrowers have their loans forgiven.

A lower court ruled against the Republican officials from six states, but an appeals court held in favor of the states, finding that Missouri would be harmed in the future. That judge filed a national injunction, effectively halting the program.

Four of the justices said they were skeptical that the state had legal standing.

U.S. Department of Education v. Brown was brought by a conservative advocacy group on behalf of two student loan borrowers, Alexander Taylor and Myra Brown, who argue that the Biden administration did not go through the proper rule-making procedure when enacting the debt relief plan, among other things.

Taylor is eligible for up to $10,000 in student debt relief, but not up to $20,000, which is for recipients of Pell Grants. Brown does not qualify for any loan forgiveness because her loans are now held by private entities. The Department of Education tried to allow borrowers such as Brown to consolidate their debt into a Direct Loan in order to qualify for relief, but it reversed its policy to avoid legal challenges.

The conservative justices questioned the fairness of the program and if the Biden administration had taken into consideration people who would not benefit.

Brown had a business loan forgiven through the Biden administration's Paycheck Protection Program, which was used to help businesses weather the coronavirus pandemic. She owns the Texas business Desert Star Enterprises Inc, which was granted a $48,000 loan and $47,996 was forgiven on April 27, 2022.

Sotomayor said that the other borrower in the case, Taylor, who qualified for up to $10,000, would get nothing if this program is struck down.

A decision from the court could take months but would come before the end of the term this summer.

The Biden administration has stated that regardless of the outcome, the pandemic-era pause on federal student loan repayments will lift on June 30, and those borrowers will be required to begin repayments either after the Supreme Court's decision or 60 days after the June deadline.

As both sides argued their cases before the court, more than two dozen organizations bused in hundreds of borrowers and supporters of student debt relief to rally outside the Supreme Court.

The legal challenges have left millions of federal student loan borrowers in limbo. The Department of Education has collected more than 24 million applications for the program and 16 million borrowers were accepted.

Due to the pending lawsuit, the Department of Education had to stop accepting applications after lower courts put the program on hold.

The ranking member of the House Education and Workforce Committee, Democrat Bobby Scott of Virginia, said in a statement that the Biden administration's plan supports borrowers who need it most, arguing that 90% of the student loan relief would go to borrowers who make less than $75,000 a year.

"Unfortunately, Republican politicians are denying borrowers — including an estimated 140,000 borrowers in my home district — the relief they need to make ends meet," he said. "Regardless of these political challenges, I will continue working to solve the underlying problems that caused the student debt crisis in the first place."

Warren has called for as much as $50,000 in student loan forgiveness. She released a report in February that stated middle- and low-income families would be provided with relief and the program.

Senate Majority Leader Chuck Schumer of New York also said on the Senate floor the program was critical relief for low- and middle-class families.

"This isn't a handout to the wealthy — far from it," he said. "This is critical relief to working and middle-class families. For generations, higher education was the ladder up into the middle class — especially for millions of black, Latino, and Asian Americans."