The Supreme Court heard oral arguments on President Biden’s plan to forgive $10 thousand to $20 thousand in student debt for 43 million people. The justices are considering two cases: Biden v. Nebraska, which was brought forward by a group of states, and Department of Education v. Brown, filed on behalf of two individual borrowers.
The justices will need to decide whether the president can forgive the loans unilaterally, without explicit congressional approval. Lower courts have blocked the administration from moving forward.
The president’s plan is projected to cost $400 billion over 30 years. According to the Biden administration, 26 million people have applied.
“I think most casual observers would say if you’re going to give up that much amount of money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy. They would think that’s something for Congress to act on,” Chief Justice John Roberts told U.S. Solicitor General Elizabeth Prelogar.
“During the pandemic, Congress enacted a provision of the American Rescue Plan that specifically anticipated and sought to facilitate a program of loan discharge by providing that it wouldn’t be subject to federal taxation from 2021 to 2025. So I think that that congressional action actually carries more weight in the analysis,” Prelogar responded.
Liberal justices contend the president does have the authority to forgive loans under the Heroes Act. The law was passed in 2003 and gives the education secretary the authority to waive or modify student financial assistance in the event of a war or national emergency.
“I mean, we worry about executive power when Congress hasn’t authorized the use of executive power. Here Congress has authorized the use of executive power in an emergency situation,” Justice Elena Kagan said.
“Your Honor, I disagree that this is congressional authorization because it’s not a modification. It goes way beyond that. It creates a brand new program. And that’s not what the Heroes Act allowed,” Nebraska Solicitor General James Campbell responded.
In addition to making a decision on the merits of the case, the justices will also decide whether the plaintiffs have the standing to sue in the first place. Both liberal and conservative justices cast doubt on that. In Biden v. Nebraska, the states used the Higher Education Loan Authority of the State of Missouri (MOHELA) as a basis to say they can file suit. The parties have to show they would incur financial harm if the forgiveness were approved.
“It would be hard to see how a win for the state would benefit MOHELA or a win for MOHELA would benefit the state if the assets are completely separate. You don’t get any money out of it,” Justice Amy Coney Barrett said.
Some of the justices were skeptical of Department of Education v. Brown as well.
“This is so totally illogical to me that you come into court to say I want more. I want to file a suit to get more, but I know I’m gonna get nothing.” Justice Sonia Sotomayor said. “You strike it down, he gets nothing.”
If the justices decide the states or the individuals don’t have standing to file this lawsuit, the respective case will be thrown out.
