Judges could sidestep legality of Biden’s student debt plan
Supporters of student debt relief gather before the Supreme Court on Capitol Hill in Washington Tuesday, February 28, 2023, ahead of a dispute over President Joe Biden’s student debt relief plan.
The United States Supreme Court on Tuesday heard much-anticipated hearings in two challenges to President Joe Biden’s plans to forgive millions of borrowers on student loan debt. During a nearly four-hour conversation with attorneys, the judges seemed far more focused on how to circumvent the decision on the program’s legality than on analyzing its merits.
In Biden vs. Nebraska, sued six states with Republican attorneys general, arguing that the HEROES Act was not an adequate legal basis for the plan. A trio of Republican-appointed judges from the U.S. Circuit Court of Appeals for the 8th Circuit temporarily halted the program in October 2022 while the legal battle continued. Immediately thereafter, the Biden administration asked the judges to intervene, but the judges refused to do so in one short unsigned order on December 1, 2022.
the companion case, Department of Education v. Brown, was filed in Texas by two student loan borrowers, neither of whom are fully qualified to participate in the loan origination plan. The two borrowers argue that the entire plan should be locked because they have been locked out of its full benefits. The district court sided with the borrowers and the Fifth Circuit declined to set aside the verdict, leading to an appeal to the Supreme Court.
At hearings, much of the conversation was confined to the two main streets, which would provide the judges with a clean exit to avoid a decision on the legality of the program overall.
The lesson of the big questions
Several judges repeatedly scrutinized the presenting attorneys as to how the “big questions doctrine” could strip the Supreme Court of any authority to rule on challenges to Biden’s program.
The Major Questions Doctrine is a rule of law that requires Congress to delegate certain powers to decide issues of major political or economic importance. The fate of the student loan relief plan is clearly one that has made headlines since its inception, but that doesn’t necessarily mean it should escape judicial review on that basis.
Speaking in favor of the Biden administration, Attorney General Elizabeth Prelogar was pressed by several judges to determine whether the program — a key campaign promise for the president — wasn’t exactly the kind of matter that would constitute an “important issue.”
Prelogar refused to comply. She called the consequences of the loan forgiveness program “economically significant,” but argued that such significance “cannot be the sole trigger for the Big Questions doctrine.”
When Judge Samuel Alito repeatedly urged the Attorney General on the applicability of the doctrine, Prelogar went so far as to argue that Congress did speak clearly in connection with the COVID-based loan forgiveness.
Prelogar told Alito that the credit relief program was enacted under the HEROES Act — a federal law in response to a national emergency. In that law, Prelogar argued, Congress specifically authorized the Secretary of Education to enact student loans; Prelogar also pointed out that even former Secretary of Education Betsy DeVos relied on the HEROES Act to suspend loan repayments.
Should a majority of the judges not be convinced that the doctrine of the big questions prohibits them from deciding the cases, there is another important diversion that seemed to cross their minds during the arguments: standing.
Stand
There is a statutory requirement that a plaintiff in a judicial proceeding suffer actual harm as a result of the contested act. Should the judges agree that either the group of Republican-run states or the two excluded borrowers (or both) were not actually harmed by Biden’s plan, the judges could decline to fully rule on the matter.
In Biden v. Nebraska, judges were skeptical that states themselves suffered actionable reputation-building damages. This analysis focuses on the relationship between the Missouri Higher Education Loan Authority (MOHELA) and the state of Missouri. MOHELA, the credit management company, was incorporated by the Missouri General Assembly and is directed by a board of directors appointed by the state governor.
“Why isn’t MOHELA responsible for deciding whether to bring that suit?” Judge Elena Kagan asked bluntly. Kagan later commented that SCOTUS does not allow third parties to interfere with a standalone entity’s decision as to whether or not to file a lawsuit.
Alito later brought up a case 1995 in which SCOTUS ruled that the relationship between Amtrak and the government was so close that Amtrak’s actions could legally be considered government actions. Notably, however, Amtrak’s actions have been attributed to the federal government as the accused, and not as a plaintiff to justify the right to sue.
The board was even more skeptical about the position of plaintiffs in Department of Education v. Brown.
At one point, Judge Sonia Sotomayor told student loan attorney J. Michael Connolly that his reasoning was “completely illogical” as his clients claim they did not get enough relief when they tried to shut down the program altogether.
Several judges argued over Chief Justice John Roberts’ hypothetical question about an imaginary owner of a lawn care business with business credit (but not University student Loans), who challenged the student loan exemption, claiming it was unfair to exclude him from the program.
Judge Amy Coney Barrett asked Connolly if someone who paid off their loans last year could sue because they were disfellowshipped.
Although both cases before SCOTUS raise similar questions regarding the applicability of the Major Questions doctrine, they each raise different questions regarding position. Accordingly, various options are available to judges to avoid examining the merits of cases. Whether they’ll rely on standing still or the key questions doctrine to jettison either case remains to be seen.
You can view the full oral submissions in Biden v. Listen to Nebraska Here and in the Ministry of Education against Brown Here.
[image via AP/Patrick Semansky]
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