Three justices dissented
In a 6-3 decision won by its conservative members, the U.S. Supreme Court has thrown out President Joe Biden’s student loan forgiveness plan, ruling that no law authorised the Secretary of Education to tweak the student-aid programmes to the extend that they did, even in light of the COVID-19 pandemic.
The Biden administration planned to forgive a total of US$430 billion in student debt under the Higher Education Relief Opportunities for Students Act of 2003 – or HEROES Act – which allowed the U.S. Secretary of Education to “waive or modify any statutory or regulatory provision” relating to the student loan program granted under the Education Act of 1965 as needed to ensure that students were “not placed in a worse position financially in relation to [the loan]” just because they were affected by a national emergency. In this case, the Secretary deemed students under a threshold annual income of less than US$125,000 to be individuals affected by the COVID-19 pandemic and entitled to a waiver of debt. The secretary would forgive such students at least US$10,000 in federal student debt.
In Biden v. Nebraska, the U.S. Supreme Court, speaking through Chief Justice John Roberts, said the text of the HEROES Act did not give the Secretary the authority to rewrite the Education Act “from the ground up”.
“To begin with, statutory permission to ‘modify’ does not authorize ‘basic and fundamental changes in the scheme’ designed by Congress,” said the court. “Instead, that term … must be read to mean ‘to change moderately or in minor fashion’.”
Roberts pointed out that Biden’s student debt forgiveness plan did not just waive or modify a particular provision of law. It instead specified “particular sums to be forgiven and income-based eligibility requirements”. The court considered these to be “new and substantially different” additions to the law beyond the concept of waiver or modification.
“[In] the end, the Secretary’s plan relies on modifications all the way down,” the court said. “And as we have explained, the word ‘modify’ simply cannot bear that load.”
Justice Elena Kagan dissented in the case, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson. While Kagan agreed with the majority that this was a case about one branch of government exceeding its scope of authority and encroaching on another’s, she concluded that it was the court that had done so by ruling the way it had.
To the dissenting judges, the HEROES Act enabled the Secretary of Education to “give the relief that was needed, in the form he deemed most appropriate, to counteract the effects of a national emergency on borrowers’ capacity to repay”.
“That may have been a good idea, or it may have been a bad idea,” Kagan said. “Either way, it was what Congress said.”
To begin with, the dissenting judges did not think that any of the U.S. states assailing Biden’s student loan forgiveness plan had any standing to challenge a government action, which normally required a plaintiff suffering injury in fact from the assailed government act.
“The plaintiffs in this case are six states that have no personal stake in the Secretary [of Education]’s loan forgiveness plan,” Kagan said. “… [In] adjudicating their complaint … the court forgets its proper role. The court acts as though it is an arbiter of political and policy disputes, rather than of cases and controversies.”
In contrast, the majority held that Missouri had standing because the student loan forgiveness plan affected its Higher Education Loan Authority, which owned over US$1 billion in federal family education loans.
The American Bar Association (ABA) president, Deborah Enix-Ross, commented on the decision by first recognising the burden that heavy student loan debts had placed on borrowers.
“Today, in Biden v. Nebraska, the U.S. Supreme Court overturned efforts by President Joe Biden to relieve some of those burdens,” Enix-Ross said. “Recent ABA surveys have found that student debt forces many borrowers to delay or forgo major life decisions, including marriage, having children. and buying homes. The ABA supports programs that help borrowers who are experiencing financial hardship due to student loan obligations, including suspending or forgiving some of those loans.”
