High court to hear arguments on student loan forgiveness

WASHINGTON — President Joe Biden’s far-reaching initiative to forgive student loan debt will be debated this week before a Supreme Court that is skeptical of the administration’s bold claims of power — a nearly half-trillion-dollar showdown that could affect more than 40 million Americans.

Tuesday’s oral arguments bring together a string of combustible issues: an ambitious program aimed at fulfilling a campaign promise for Biden’s political base; heightened suspicion by the Supreme Court’s conservative supermajority about the ability of federal agencies to act without specific congressional authorization; and the power of Republican-led states to use the judiciary to stop a president’s priorities before they even take effect.

“Canceling hundreds of billions of dollars in student loans — through a decree that extends to nearly all borrowers — is a breathtaking assertion of power,” Nebraska Attorney General Michael Hilgers, a Republican, writes in a brief filed on behalf of his and five other GOP-led states.

Education Secretary Miguel Cardona says the administration has the authority to forgive student loan debt under the Higher Education Relief Opportunities for Students Act of 2003. It allows the secretary to waive or modify loan provisions in response to a national emergency — in this case the coronavirus pandemic.

Cardona proposed a plan that 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. About 20 million borrowers could see their balances wiped clean.

U.S. Solicitor General Elizabeth Prelogar, who will defend the administration’s program at Tuesday’s hearing, says not only are Cardona’s actions justified by the law, they are exactly what Congress had in mind when it passed the HEROES law in the wake of the 9/11 terrorist attacks.

“The Secretary’s interpretation is not just a plausible reading of the statute; it is the best reading,” Prelogar wrote in a brief to the justices. “The Court should reject respondents’ distortion of the Act and their effort to deny student-loan borrowers the relief that Congress authorized and that the Secretary deemed essential.”

But the administration’s track record at the court — fortified in recent years with justices nominated by President Donald Trump who are more conservative than their successors — is not encouraging for the president.

The court has lifted a pandemic-era moratorium on rental evictions put in place by the Centers for Disease Control and Prevention. It threw out a coronavirus vaccination-or-testing mandate imposed on large businesses by the Occupational Safety and Health Administration. And in a ruling unrelated to the pandemic, it cited the “major questions” doctrine to limit the Environmental Protection Agency’s options for combating climate change.

The doctrine, Chief Justice John Roberts wrote in the EPA opinion, addresses “a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”

For that reason, many experts believe the administration’s best chance in the student-loan plan is to convince the court that neither the Republican-led states nor two individuals in a separate case from Texas have legal standing to challenge the initiative. Such a conclusion would relieve the court of having to rule on the merits of the case.

To qualify to challenge the loan-forgiveness effort, the 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 gave the states a toehold to continue their suit by finding that the Missouri Higher Education Loan Authority, a quasi-independent entity, could suffer losses from the program change that would hurt Missouri, one of the challenger states. A different court said two borrowers, Myra Brown and Alexander Taylor, have standing to proceed. Taylor doesn’t qualify for $20,000 of forgiveness, while Brown is ineligible altogether.

From the time Biden was elected, activists and some congressional Democrats have waged a relentless campaign to get him to fulfill his promise to cancel at least part of the $1.6 trillion in federal student debt.

Biden directed the Education and Justice Departments to produce memos on his administrative power to forgive loans but expressed skepticism. Senate Majority Leader Charles Schumer, D-N.Y.; Sen. Elizabeth Warren, D-Mass.; and Rep. Ayanna Pressley, D-Mass., were adamant that Biden could use the same authority to cancel debt that Trump’s administration used to temporarily waive student loan payments during the pandemic, a pause that has been extended multiple times and continues today.