During oral arguments on Tuesday, the U.S. Supreme Court’s conservative majority seemed skeptical about the Biden Administration’s plan to cancel student loan debts for 26 million borrowers, multiple news organizations reported.
Announced in August, the plan would provide $20,000 in debt relief to Pell Grant recipients with loans held by the DOE, and up to $10,000 in debt relief to non-Pell Grant recipients, based on income. The Congressional Budget Office estimated its cost to be $400 billion.
The high court considered two separate cases challenging the plan. Biden v. Nebraska was filed by six Republican-led states—Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. Department of Education v. Brown was filed by two individual borrowers, The New York Times reported. One is ineligible for relief under the plan because her loans are held by commercial entities rather than the government, and the other is eligible for $10,000 rather than $20,000 because he did not receive a Pell grant. The cases hinge on a separation of powers argument.
“I think most casual observers would say [that] 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,” said Chief Justice John G. Roberts, Jr., the Times reported.
Roberts and the five other members of the Court’s conservative majority invoked the “major questions doctrine,” according to the Times, which requires that government initiatives with major political and economic consequences be clearly authorized by Congress.
The Biden Administration claimed authority to take this action under the terms of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which gives the secretary of education the power to “waive or modify any statutory or regulatory provision” to protect borrowers affected by “a war or other military operation or national emergency.”
Justice Clarence Thomas suggested that the words “waive” and “modify” in the HEROES Act did not condone completely canceling a borrower’s debt, The Washington Post reported.
Justice Elena Kagan disagreed. “Congress doesn’t get much clearer than that,” she said, The Wall Street Journal reported. “We do congressional statutes every day that are really confusing. This one is not.”
Representing the Biden Administration, Solicitor General Elizabeth B. Prelogar argued that “[t]he whole point of this statute, its central mission and function, is to ensure that in the face of a national emergency that is causing financial harm to borrowers, the secretary can do something,” the Times reported. She noted that the Trump Administration invoked the law in March 2020, declaring that the coronavirus pandemic was a national emergency, initiating a pause in student loan repayment requirements and suspending the accrual of interest.
She also argued that the case shouldn't have come before the court in the first place because the six states and two individual borrowers weren’t harmed by the debt relief program and thus lacked the legal standing to sue, the Times reported.
Roberts, Alito and Justice Neil M. Gorsuch questioned whether the loan forgiveness program was fair to those who have paid off their loans, to those who financed college without debt or to those who forsook college due to the cost, the Post reported.