During oral arguments on Feb. 28, conservative members of the Supreme Court seemed skeptical of Biden administration statements that the government’s plan to partially forgive student loans is authorized by federal law.
U.S. Solicitor General Elizabeth Prelogar told the High Court that the federal Higher Education Relief Opportunities for Students Act gives the federal secretary of education blanket authority to grant loan forgiveness en masse, a contention several justices found fault with.
Biden introduced the plan in August 2022 in a move critics decried as a constitutionally dubious attempt to help Democrats in November 2022 congressional elections. The Congressional Budget Office said the plan could cost about $400 billion, but the Wharton School estimates the price tag could blow past $1 trillion.
The program is premised on the existence of the emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus.
The national emergency and the public health emergency enabled federal agencies to exercise expansive powers in managing the government’s pandemic response.
Complicating matters, Biden’s Office of Management and Budget said on Jan. 30 that it would extend the soon-to-expire emergencies to May 11 “and then end both emergencies on that date.”
The Biden administration put a pause on student loan payments and interest during the recent pandemic at an estimated cost of $100 billion but then claimed last year that the pandemic gave it emergency authority under the law to proceed with partial loan forgiveness.
Congressional Republicans say the emergencies aren’t justified and should be ended sooner.
About 26 million people reportedly applied under the program before courts blocked it last year. Of that total, 16 million are said to have been approved before the government stopped accepting applications.
The U.S. Department of Education claims that it has the authority to move forward with the debt relief proposal, which would cancel as much as $20,000 in loan principal for 40 million borrowers.
But lawmakers involved in the passage of the HEROES Act say it was enacted after the 9/11 terror attacks to provide student loan relief to military service members and their families, not to cancel debts en masse.
The Supreme Court heard two related cases dealing with the program, Biden v. Nebraska (court file 22-506) and Department of Education v. Brown (court file 22-535), back to back on Feb. 28.
The Biden v. Nebraska appeal springs from a lawsuit Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina brought against the federal government.
The other appeal arises from a lawsuit filed by two borrowers who say the department improperly denied them the opportunity to participate in the public commenting process and that they would have urged the agency to provide greater debt relief.
During oral arguments, Prelogar told the justices that canceling the student loan relief program would hurt vast numbers of Americans.
“COVID-19 is the most devastating pandemic in our nation’s history and … over the past three years, millions of Americans have struggled to pay rent, utilities, food, and many have been unable to pay their debts,” she said.
“If forbearance ends without further relief, it’s undisputed that defaults and delinquencies will surge above pre-pandemic levels.”
Prelogar argued the HEROES Act gives the federal secretary of education, Miguel Cardona, wide discretion to excuse student loan debts.
The other side countered that the statute does not specifically authorize loan forgiveness, but instead may authorize some loan modifications.
Nebraska Solicitor General James Campbell said Cardona is trying “to write off nearly half a trillion dollars” in student loans, while “attempting to bypass Congress.”
“No statute authorizes” this action, which he called “sweeping” and “unprecedented.”
“Never before has the HEROES Act been used to forgive a single loan,” he said.
Cardona “asserts a breathtaking power, to do anything that he thinks might reduce the risk of borrowers defaulting, even years after a national emergency arises. He needs clear congressional authorization for such power” but the HEROES Act does not provide it even in a national emergency, Campbell said.
Prelogar argued the states challenging the loan forgiveness plan lack legal standing to contest the program.
Responding to Justice Clarence Thomas, Prelogar said Congress in creating the HEROES Act was attempting to “broadly cover the field” to provide the secretary “the tools to respond to the national emergency with whatever relief might be necessitated.”
Justice Samuel Alito noted that Missouri is claiming that the program will hurt the revenues of the Missouri Higher Education Loan Authority (MOHELA), which the state created to service student loans. This would give the state standing, Alito implied.
“Why shouldn’t the test be something more like whether the relationship between this entity and the state of Missouri is such that an injury to MOHELA will necessarily or presumptively be an injury to the state?” the justice said.
Campbell said Missouri has the right to address harms done to the loan authority and that Cardona’s relief program would “cut MOHELA’s operating revenue by 40 percent,” which would undermine the organization’s “ability to further its critical public purposes.”
Justice Elena Kagan told Campbell the secretary has discretion. The act allows “any statutory or regulatory provision applicable to the student financial assistance programs” to be waived or modified.
“Congress could not have made this much more clear,” Kagan said.
Chief Justice John Roberts said the federal government characterizes the debt relief program as an attempt to “modify” the federal student loans program to excuse student debt.
Roberts noted that in an opinion the late Justice Antonin Scalia said the word “‘modify’ … connotes moderate change.”
Scalia said, “It might be good English to say that the French Revolution modified the status of the French nobility, but only because there’s a figure of speech called understatement and a literary device known as sarcasm,” the chief justice said.
“We’re talking about half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of ‘modifying’?” he said.
Prelogar said in the act the word “‘modify’ has to mean making a change up to the point of wholesale elimination.”
“It would be really strange for Congress to say you can eliminate obligations altogether or tweak them just the littlest bit, but you can’t do anything in between,” the government’s top attorney said.
The Supreme Court is expected to render its judgment by or before June.
From The Epoch Times