In the previous article in this series, I outlined the Biden administration’s argument for using the HEROES Act as authority to enact the Biden-Harris Student Debt Relief Plan. Now that I’ve covered the arguments both for and against the plan, let’s take a look at what the Supreme Court of the United States (SCOTUS) has to say about this approach toward assisting borrowers who are saddled with student debt.
The Verdict on Student Debt Forgiveness
Okay, let’s get straight to the point. The case in question, Joseph R. Biden, President of the United States, et. al. v. Nebraska et. al., resulted in SCOTUS rejecting the legality of the Biden-Harris Student Debt Relief Plan. The legal body was split 6-3 against the administration’s effort. I’m writing this article to explore the reasoning behind the SCOTUS snub of Biden’s plan.
SCOTUS publishes its opinion along with its verdict. The overall document, once published, is called a slip opinion. This resource provides both the reasoning for the verdict and any opposing opinions held by the voting minority of justices. The basic structure of a SCOTUS slip opinion is as follows:
- Syllabus – This portion of the document both describes the case, lays out the reasoning for the court making a decision on the issue, and provides the court’s final verdict.
- Opinion of the Court – This is the reasoning for the court’s verdict. This will be the opinion of the majority of justices who voted in line with the court’s final decision.
- Concurrent Opinion(s) – This could be one or more opinions held by justices that are not the same as the court opinion, but results in the same decision.
- Dissenting Opinion(s) – This could be one or more opinions held by the minority of justices who vote in opposition to the Opinion of the Court.
I’ll write a summary of the slip opinion below. A PDF copy of the slip opinion can be viewed here.
Syllabus: The Student Debt Challenge
The SCOTUS Reporter of Decisions prepares the syllabus of the slip opinion. Let’s take a look at the details.
The case presented is to determine whether the HEROES Act legally delegates the appropriate authority for the Secretary of Education, Miguel Cardona, to implement the Biden-Harris Student Debt Relief Plan and cancel about $430 billion in debt principal and affect nearly all borrows.
Once Secretary Cardona announced the orchestrated student-debt, relief plan, six states opposed the initiative in the Eighth Circuit court. The Eighth Circuit court issued an injunction against Secretary Cardona and the Dept. of Education.
Following the injunction, Secretary Cardona appealed to SCOTUS to either vacate the injunction or grant certiorari – which means to have SCOTUS review the Eighth Circuit court’s decision for injunction. This action was meant to get a decision on the debt relief plan earlier than would have happened if the Secretary would have waited for a hearing with the Eighth Circuit court. SCOTUS granted certiorari.
The actors in the case are also laid out in the syllabus. The defendants (also called “appellees”) are President Joseph R. Biden, Secretary of Education Miguel Cardona, and the Department of Education. The plaintiffs (also called “appellants”) are the states of Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina. The nine justices of the Supreme Court of the United States are presiding over the case.
The state of Missouri is found to have proper standing to bring the case against the defendants. The company MOHELA is determined to be an instrument of the state. This stated relationship is enough for SCOTUS to consider that Missouri will suffer injury based on any possible MOHELA losses that would result from the implementation of the student load debt relief plan.
Secretary Cardona appeals to the court stating the the HEROES Act delegates substantial powers that allow him to enact policy commensurate to the level of any national emergency the Department of Education must face. The court finds that the HEROES Act does not grant the Secretary of Education the authority to implement a plan of the proposed scale.
The Supreme Court reversed the decision of a lower court and remanded the case. I’ll cover the particulars of this point in the section covering the Opinion of the Court.
Court Opinion: Student Debt Can’t Be Forgiven in This Way
The Opinion of the Court represents the decision agreed to by the majority of justices on the Supreme Court in regard to this issue. This particular opinion was written by Chief Justice Roberts. Joining in on this opinion are Justice Thomas, Justice Barrett, Justice Alito, Justice Kavanaugh, and Justice Gorsuch. In this section, I’ll summarize the court’s reasoning for declaring the student debt forgiveness illegal.
A Plaintiff With Standing
In order for a case to be accepted by the court, at least one member of the group of plaintiffs must be found to have standing. Standing refers to the plaintiffs’ eligibility to bring the case before the court. These are Constitutionally dictated terms that the court must abide by before accepting a case. The groundwork for this can be found in Article III, Section 2, Clause 1 of the Constitution of the United States of America. In this case, Missouri is found to have standing due to the company, MOHELA. MOHELA is a student loan servicing corporation that was created by Missouri and acts as an instrument of the state. The court considers this relationship significant enough to acknowledge that the proposed student-debt, forgiveness plan would cause injury to the state.
What Does the Law Say?
Next, the court looks at the active phrase, and, particularly the verbs, that describe the authority delegated to the Secretary of Education: “…the Secretary of Education (referred to in this part as the ‘‘Secretary’’) may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the Act…” 20 U.S. §1098bb(a)(1).
The court has determined that the word “modify” only relates to minor changes. Further, the court finds that the attempted waiver – extinguishing principle amounts from loan balances – does not apply to any specific provision regarding repayment. The court believes that the Secretary’s plan is more broad than the level of authority specified in the HEROES Act. The justices indicate that Secretary Cardona is suggesting that he is authorized to strike large sections of the Higher Education Act (20 US §1070) and rebuild them from the ground up.
Justices Ask Major Questions
Next, the court majority considers the severity of the economic impact that would arise as a consequence of implementing the plan. A Wharton School of the University of Pennsylvania study is cited to put a dollar amount to the expected, economic repercussions of the plan. The plan is expected to cost between $469 billion and $519 billion. This is noted as being ten times the amount of the expected impact of the eviction moratorium that was attempted by the Centers for Disease Control and Prevention (CDC) during the COVID-19 pandemic. The court reminds us that its decision was to strike down the initiative proposed by the CDC.
Let me clarify what’s going on with the court’s assessment, at this point. There are two major legal concepts at play here: stare decisis and the major questions doctrine. Stare decisis – commonly referred to as “precedent” – refers to the courts’ consideration of how other courts of either similar or higher standing have ruled on previous, related cases. The major questions doctrine is a philosophy introduced by Chief Justice Roberts that concerns the court asking probative questions in order to undercover whether the text of the law indicates clear congressional authority that legitimates the actions in question, per the case being tried. Specifically, the court does not believe the text of the law gives clearly specified authority that matches the actions the student-debt, forgiveness plan would require.
The Verdict
As mentioned earlier in this section of the article, the court considered the economic impact of the student-debt, relief plan, the wording of the HEROES Act and related cases using the major questions doctrine. The majority of justices voted that the Biden-Harris Student Debt Relief Plan extended beyond the authority delegated by Congress via the HEROES Act.
The final decree of the Supreme Court is that the Biden-Harris Student Debt Relief Plan, as constructed by the Secretary of Education, is illegal and cannot be carried out. Further, SCOTUS reversed the decision of the Eastern District Court of Missouri, remanded the case for further judicial proceedings with respect to the SCOTUS decision, and denied the Secretary of Education’s request to have the Eighth Circuit Court’s injunction vacated.
In the previous section, I mentioned I’d explain the SCOTUS final orders. I’ll break that down now.
First, let’s go over the chain of events that lead to the case being presented to SCOTUS. Once Secretary Cardona published the debt-relief plan, the six, plaintiff states brought a case against the President, Secretary and Dept. of Education in the Eastern District Court of Missouri. The district court found that the plaintiffs did not have standing, and it dismissed the case. Following the dismissal, the plaintiff states appealed to the Eighth Circuit Court of Appeals, and asked for an injunction against the Secretary’s plan. The circuit court agreed that Missouri had standing, and it granted the injunction. The debt-relief plan was then placed on hold. Secretary Cardona then appealed to the Supreme Court. The request to SCOTUS was to both vacate the lower court’s injunction and grant certiorari – having SCOTUS both hear the case instead of the lower court and provide a resolution in a more immediate timeframe.
The orders from SCOTUS now become clear. The court reverses the district court’s dismissal based on Missouri now being considered to have proper standing to bring the case before the courts. Further, SCOTUS remands the case back down to lower courts to complete the legal proceedings associated with determining a verdict. This is done because appellate courts determine legality. That is to say that the appellate courts, which the Supreme Court is one, reviews the legality of contended issues within a case. However, the final verdict of the case must be handed down by a trial court. Therefore, appellate courts provide a deferential decision on the legal matters of the case. Once those legal issues are decided, the case is sent back to trial court to undergo litigation based on the decisions of the higher, appellate court. In this instance, the Supreme Court – the highest court in the land – has provided determination on two important issues related to this case: 1) the group of plaintiffs do have standing based on the relationship between the State of Missouri and MOHELA, and 2) the debt-relief plan extends beyond the authority delegated to the Secretary of Education in the HEROES Act. The lower court – the Eastern District Court of Missouri – will likely now review the case again with the SCOTUS determinations acting as stare decisis (or precedent) regarding the two contended issues. Finally, SCOTUS denies Secretary Cardona’s request to vacate the Eighth Circuit Court’s injunction since said injunction is preventing action on a plan the court has deemed unlawful.
Concurrent Opinion: Another Way Student Debt Forgiveness Is Unreasonable
Justice Barrett wrote a concurring opinion on the case. Although in full agreement with the majority opinion, she writes to specify that the major questions doctrine both is not needed to reach the Opinion of the Court and stands valid as a tool to be used by the court to assist in making legal determinations.
This section of the slip opinion serves as additional reinforcement for the arguments already made in the Opinion of the Court. I don’t believe it warrants additional coverage, here. If you are curious about the details, then I invite you to read the opinion in its original, published text (link above).
Dissenting Opinion: In Defense of the Student Debt Relief Plan’s Legality
Justice Kagan wrote the dissenting opinion that elucidates the views of herself and the other dissenting justices: Justice Sotomayor and Justice Jackson.
The dissent takes aim at a few major points of contention: plaintiff standing, interpretation of legal text and the major questions doctrine. The minority of justices argue that Missouri did not have proper standing to bring the case. Also, the use of the major questions doctrine in this case is charged as inappropriate with regard to the primary concerns and role of the court.
The Issue with Standing
The opposing justices point out that provable “particularized injury” – per Article III, Section 2, Clause 1 of the U.S. Constitution – must be proven for plaintiffs to have proper standing to bring the case before the court. The tie between MOHELA and the State of Missouri is the only provided reasoning for Missouri receiving the acknowledgement of proper standing. Here, the dissent argues that MOHELA acting as an instrument of said state is insufficient. While MOHELA is a state-created corporation, it is a wholly independent entity that has the right to both sue and be sued. Further, MOHELA’s assets are stated to be of no consequence to the State of Missouri. That is to say that none of the proceeds generated by MOHELA are considered to be state funds, in any way. Since there is no economic impact to the State of Missouri, there can be no proper standing claimed by the state for the purposes of this case being accepted by the court.
The defiant argument goes further. It is agreed that MOHELA will suffer injury if the relief plan is enacted. However, the justices question why MOHELA has not chosen to sue on its own since it would definitely have standing. Next, the opinion lays out the unwillingness of MOHELA to cooperate with the state of Missouri when the state requested documents related to the company’s loan servicing contract. The state had to forcibly acquire the documents via what is referred to as a “sunshine law.” Missouri’s sunshine law is a set of rules used by certain governments to force specific companies and government agencies to disclose documents to the public. Therefore, MOHELA would have to come forward, independently, since it is the entity that qualifies for proper standing. Without MOHELA as a plaintiff, there is no valid case for the court to consider.
Concerns With Legal Text
Justice Kagan’s piece is clear than moving onto the merits of the case should not be necessary given that none of the plaintiffs have standing. However, to complete the dissent, she continues to address the opposition on these merits.
Continuing the challenge, the objection piece points to the interpretation of the HEROES Act text. Accusing the majority of being to deconstructionist in their review of the text, the minority interprets the text, as a whole. Instead of looking at the words “modify” and “waiver” separately, the writing discusses that the legal text states that the Secretary of Education can “… waive or modify…” 20 U.S. §1098bb(a)(a). The interesting point here is that this offering considers that the underlying meaning is that the Secretary can modify – make minor changes – or go all the way up to complete elimination of current regulatory text in the Higher Education Act, 20 U.S. §1070. Further, the justice’s writing acknowledges that eliminations of provisions would require the addition of new, replacement provisions to create a complete program when the Secretary needs to implement the emergency powers in the HEROES Act. To support this theory, the opinion points to another section of the HEROES Act. In 20 U.S. §1098bb(b)(1)-(2). The text at that location of the code of laws is stated below.
(b) Notice of waivers or modifications
20 U.S. §1098bb(b)(1)-(2)
(1) In general
Notwithstanding section 1232 of this title
and section 553 of title 5, the Secretary shall,
by notice in the Federal Register, publish the
waivers or modifications of statutory and regulatory provisions the Secretary deems necessary to achieve the purposes of this section.
(2) Terms and conditions
The notice under paragraph (1) shall include
the terms and conditions to be applied in lieu
of such statutory and regulatory provisions.
In particular, the dissenting opinion points to this part of the quoted text above: “…shall include the terms and conditions to be applied in lieu of such statutory and regulatory provisions.” The argument is that the legal text provided by Congress anticipated that a significant emergency could require the Secretary of Education to make broad changes to the Higher Education Act to meet urgent needs, during a national emergency. This portion of the HEROES Act acknowledges this and requires the Secretary to publish the provisions that would be in effect during the national emergency. The national emergency in question is the COVID-19 pandemic. This emergency was still in effect when the Biden-Harris Student Debt Relief Plan was both orchestrated and published. Therefore, the group of justices represented here believe that the HEROES Act does grant the Secretary of Education the authority to enact the Biden-Harris Student Debt Relief Plan.
Questions About Major Questions Doctrine
The next counter levied is toward the use of the major questions doctrine, in this case. The continuing critique points to the court majority’s overreliance on assessing the economic impact of the relief plan and comparing it to previous uses of the HEROES Act. The writer argues that previous uses of the HEROES Act cost up to $100 billion due to the requirements of the effort to curb fallout from the emergencies that were present. The opinion then points to the fact that the law was written as such because Congress could not have known the exact kinds of emergencies that may arise. Therefore, broad authority was delegated to the Secretary that could only be accessed during either war and other military operations or a national emergency.
Further, the text resumes its combat of the majority’s philosophy by stating that the major questions at use break the boundaries of the prescribed duties of the court. The court should only determine what is legal and what is not legal based on the context of the written laws and circumstances of the case. Opining on larger economic and policy issues push beyond the purview of the court based on the separation of powers as stated in Article I – Article III of the Constitution of the United States of America.
Last Gasp
As only three justices agree with these opposing views, student-debt forgiveness would be struck down. However, Justice Kagan volleys final thoughts on the entire case. She censures the majority based on several points: 1) granting standing to plaintiffs that arguably do not have it, 2) hypocritically submitting questions to view the case with additional context beyond the written law while not interpreting the HEROES Act in full context, and 3) arrogating administrative and legislative authority via overreach as a result of misuse of the major questions doctrine. I think I’ll close this section out with Justice Kagan’s final comments.
“So in a case not a case, the majority overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans. I respectfully dissent from that decision.”
Justice Kagan, Dissenting Opinion, 600 U. S. __ (2023)
Biden Still Pushing for Student Debt Forgiveness
President Biden still seeks a way to assist borrows who are burdened with student load debt. Both Biden and Secretary of Education, Miguel Cardona, seek authority to enact some version of student debt forgiveness based on the Higher Education Act. In the next article of this series, I’ll walk through the presidential administration’s new approach.
2 responses to “SCOTUS Decrees Student Debt Forgiveness Is Illegal”
Excellent synopsis and unbiased analysis!
Well written, well explained and very informative! Overall good read. Thanks for sharing.