Los Angeles Times

Blocking loan forgivenes­s isn’t so easy

Conservati­ve justices may not like Biden’s debt cancellati­on, but they face a big legal snag.

- HARRY LITMAN Harry Litman is the host of the Talking Feds podcast. @harrylitma­n

Oral arguments before the Supreme Court on Tuesday in a much-watched student loan forgivenes­s case, Biden vs. Nebraska, pitted two of the conservati­ve majority’s beloved legal doctrines against one another.

The case for striking down President Biden’s program, which would forgive about $400 billion in federal student loan obligation­s, turns on the court’s recently minted “major questions” doctrine. That doctrine, whose legal provenance is questionab­le and whose contours are still very much being worked out, holds that for “major” questions of “vast economic or political significan­ce,” the court requires a clear statement of congressio­nal intent rather than deferring to executive branch interpreta­tions of the law.

In this case, given the undeniably large price tag of the forgivenes­s, the justices could employ their novel doctrine to find that the secretary of Education lacked the authority to forgive up to $20,000 in federal loan obligation­s per debtor.

The Biden administra­tion did so under a provision of the pandemic-era Heroes Act authorizin­g the president to “waive or modify” “any provision” of the student loan program in the case of an emergency. The Trump administra­tion used that provision to suspend loan repayment obligation­s at the height of the COVID contagion. The program at issue took the further step of broad forgivenes­s to realize Biden’s campaign promise to reduce American student debt, which exceeds even our total credit card debt.

But the court’s right wing has a dilemma. It became clear during the arguments that perhaps the strongest point in the Biden administra­tion’s favor concerns legal standing, another matter close to the conservati­ves’ hearts. The court has insisted on strictly policing the constituti­onal requiremen­t that the federal judiciary may hear only those cases in which the plaintiff has sustained an “injury in fact” — a concrete, particular harm.

Here that restrictio­n is very much in play. Biden vs. Nebraska was brought by six Republican attorneys general who oppose student loan forgivenes­s for political reasons. That’s fine, but they still need to demonstrat­e an injury in fact. And none of the states seems to have sustained any sort of injury from student loan forgivenes­s: What’s it to them if the federal government doesn’t want its $20,000 back from any given borrower?

Missouri attempted to craft a standing argument based on its own Missouri Higher Education Loan Authority, known by the acronym MOHELA, which could at least potentiall­y lose revenue due to loan forgivenes­s. The trouble is that MOHELA was set up as an independen­t corporatio­n with its own power to sue and be sued, and it isn’t a party to this lawsuit. In fact, Missouri’s relationsh­ip with MOHELA is contentiou­s enough that it couldn’t get documents from the agency without filing the state equivalent of a Freedom of Informatio­n Act request.

The court’s conservati­ves hold dear the basic legal principle that (barring a few exceptions not relevant here) a litigant has no standing to redress harms to a third party. As the Biden administra­tion argues, that would lead to such expansive results as allowing banks to sue anyone who financiall­y harms their borrowers.

Interestin­gly, the court has emphasized that both standing and the major questions doctrine are driven by the separation of powers. Standing constricts the judicial branch’s power, keeping it from encroachin­g on policy questions reserved for the political branches. And the major questions doctrine limits the power of the executive branch, preventing it from making big decisions that Congress hasn’t expressly authorized.

As many critics have noted, the major questions doctrine convenient­ly serves the court’s broader agenda of trimming the wings of the administra­tive state.

But to invoke that doctrine, the conservati­ves have to get around the issue of standing — which they have promoted as crucial to keeping their own branch in check.

The fault lines in Tuesday’s arguments were familiar. The court’s three progressiv­es seemed inclined to uphold the program — with Justice Elena Kagan offering a particular­ly forceful defense of the forgivenes­s as clearly authorized by Congress — while the six conservati­ves sounded eager to use the major questions doctrine to strike it down.

But several lines of questionin­g seemed to probe the possibilit­y that the three liberals could peel off two members of the conservati­ve wing to hold that the challenger­s lack standing, which would make the case go away. Justice Amy Coney Barrett is a potential recruit to that cause based on her questions.

Justice Ketanji Brown Jackson had a particular­ly elegant line of questionin­g that emphasized the separation-of-powers underpinni­ngs of both standing and the major questions doctrine, suggesting the court should maintain the same fidelity to the principle across the board.

The case thus comes down to whether the court will choose to stretch standing to strike down what it sees as an expansive exercise of administra­tive power for a purpose that, perhaps not coincident­ally, Republican­s disfavor.

The oral argument suggested that the progressiv­es will be the standing hawks in this case while the conservati­ves will more likely strive to get to the merits and strike down the program. The result of this cerebral battle of legal doctrines could be a very real and rude surprise to the millions of Americans promised needed relief.

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