Supreme Court considers fate of Biden's student loan relief plan

Nebraska Solicitor General James Campbell, who is representing all the GOP states suing over the debt relief program, received tough questions from several justices about whether the states have really proved that they would be harmed by the loan forgiveness program in a way that would warrant a court intervention.

That line of questions included a grilling from Justice Amy Coney Barrett, who zeroed in on how MOHELA — the Missouri-created entity that services loans in the state and which Missouri is pointed to as giving it standing — could have opted to challenge in court the debt relief policy but hasn't.

Before Barrett's inquiries, Justice Ketanji Brown Jackson also pressed Campbell on whether the supposed harms the loan forgiveness program was causing MOHELA really established standing for Missouri, as did Kagan, who highlighted MOHELA's absence from the lawsuit.

A case concerning a moratorium that had been placed on evictions during the Covid-19 pandemic keeps coming up in Tuesday's student debt relief policy arguments. 

US Solicitor General Elizabeth Prelogar tried to draw a distinction between the two cases while answering a series of questions from Justice Brett Kavanaugh. She said the Centers for Disease Control and Prevention eviction case brought up concerns of an agency acting "outside the core of its domain," but that is not what is happening with the Department of Education.

Those challenging the student debt forgiveness say there are parallels between the two cases, while the Biden administration argues the disputes are distinct. 

The eviction moratorium case did not even get a full hearing before the Supreme Court. What has been cited by President Joe Biden’s foes is a per curium order — an unsigned order from the Supreme Court that blocked the CDC policy that tenants could not get evicted while the moratorium was in place.

The case was seen as a forerunner to the Supreme Court’s full-scale endorsement — in a case handed down in June — of the so-called major questions doctrine, which says that if Congress is going to give the agency the power to make policy on a matter of significant political or economic consequence, lawmakers can be expected to say so with specificity in the laws that they pass. 

“If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it,” the court said in the August 2021 order. The liberals on the court at the time dissented.

Opponents of the student debt program say that Tuesday’s case arises in similar circumstances as the eviction moratorium dispute: an executive branch agency allegedly using the pandemic as a pretext to go beyond the authority that Congress has given it to enact a major policy change. 

Justice Ketanji Brown Jackson gave US Solicitor General Elizabeth Prelogar the opportunity to stress how a ruling that said the states had standing in this case could hamper the federal government's ability to operate.

Prelogar agreed that it was a "legitimate concern." She noted that past things the court has said about standing and how "the judiciary doesn't sit as a roving commission to rule on the legality of either Congress's enactments or the executive's implementation of those enactments."

Justice Brett Kavanaugh, in comments to US Solicitor General Elizabeth Prelogar, suggested he saw the student debt case existing in a history of the court deciding whether it would defer to an executive branch claim that a national emergency warranted aggressive unilateral action.

The Biden administration is arguing that the national emergency presented by the Covid-19 pandemic — and the economic disruption the pandemic wrought — justified the education secretary canceling the student loans of certain debtors.

He asked Prelogar to explain to the court "how we should think about our role in assertion of presidential emergency power, given the court's history. "

Prelogar returned to a theme that she has brought up repeatedly in Tuesday's arguments: that there is distinction between an executive action that regulates people's conduct versus an action that deals with the doling out of government benefits.

Justice Clarence Thomas questioned US Solicitor General Elizabeth Prelogar about the distinction between the Biden administration's student loan debt forgiveness program and grants that Congress needs to appropriate.

"There's some discussion in the briefs .... that this is in effect a cancellation of a debt, that's really what we're talking about, and that as a cancellation of $400 billion in debt, in effect this is a grant of $400 billion and it runs headlong into Congress' appropriations authority," Thomas said.

Prelogar said that implementing the debt relief program doesn't require that any money be drawn from the Treasury, so it doesn't strictly raise an appropriations issue.

She also said while loan forgiveness would "of course" result in cancellation of a measure of debt for borrowers, she doesn't "think that that is materially different from the kind of effects you can see from other types of authority that's long been exercised under the HEROES Act."

Thomas said he didn't think she fully explained why you could not argue that the education secretary could just grant $400 billion — which would require appropriations from Congress.

Prelogar gave an example of relief in periods of extended deferment for soldiers fighting abroad, in which the government has paid interest on loans.

"That's exactly what Congress intended under this authority; it's to make those changes to the program in direct response to and in direct proportion to the situation the secretary confronts that will otherwise leave that borrower worse off," she said.

Nebraska’s Solicitor General James A. Campbell is now speaking at the podium before the nine justices after US solicitor General Elizabeth Prelogar wrapped her arguments on behalf of the Biden administration.

Campbell is representing the six states that say they would be harmed financially if President Joe Biden's student loan forgiveness program goes into effect.

He is expected to offer several theories to explain why the states will be injured by the plan. Most of his theories revolve around the potential of lost tax revenue. He's also expected to stress that the plan amounts to an unlawful attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

Chief Justice John Roberts made clear that he saw the student debt forgiveness as an important opportunity for the court to further flesh out its "Major Questions Doctrine."

"I just wonder, given the posture of the case and given our historic concern about the separation of powers, you would recognize at least that this is a case that presents extraordinarily serious important issues about the role of Congress and about the role that we should exercise in scrutinizing that, significant enough that the Major Questions Doctrine ought to be considered implicated?" Roberts said.

Remember: Under the “Major Questions Doctrine," if an agency acts in a way that could have major political or economic implications, it must have the authority of Congress. The states are saying here that essentially, the college debt relief plan is too big for the Biden administration to use the authority in its citing.

Justice Neil Gorsuch asked whether the Biden administration considered the cost to people who are not eligible for the proposed student loan forgiveness program because they don't have student loans.

The plaintiffs said that missing from the government's analysis, Gorsuch said, is the "cost to other persons in terms of fairness, for example, people who've paid their loans... and people who are not eligible for loans in the first place."

More context: Americans who did not go to college or already paid off their student loans won’t see a direct benefit from Biden’s program, which the Congressional Budget Office has estimated will cost $400 billion over time. Also, a one-time cancellation of federal student loan debt does nothing to bring down the cost of college for future borrowers.

About 81% of households who earn less than $125,000 a year don’t have student loan debt, according to an analysis done last year by Matthew Chingos, vice president of education data and policy at the Urban Institute. He based the estimation on the 2019 Survey of Consumer Finances conducted by the Federal Reserve.

Justice Neil Gorsuch brought up the court's decision in 2019 that blocked former President Donald Trump's plans to add a citizenship question to the census. Chief Justice John Roberts joined the court's then-four liberals to rule in favor of the question's challengers and that ruling is one of the cases that the opponents to student debt relief are citing to back their standing arguments.

Gorsuch noted Tuesday that the court said in the census case, that the potential undercount of the citizenship question would cause New York established standing for New York to bring that case, because an undercount would have cost New York federal funding and a loss in other benefits.

Prelogar said that in the census case the injury that would have been caused by an undercount was more direct, and that in the student debt case, the financial injuries the states were claiming were "self inflicted."

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