Declaration of Independence

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. - That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

Wednesday, March 1, 2023

What Will Justices Decide on Student Loan Debt?

Yesterday, the U.S. Supreme Court heard arguments in two cases that challenge the claim that President Joe Biden has the authority to forgive student loan debt. The administration claims that the HEROES act can be used to cancel $430 billion in student loans borrowed by 40 million students. The HEROES Act is a law meant to give emergency help to military personnel responding to national security emergencies. Jack Fitzhenry and GianCarlo Canaparo explained the proceedings. 

An important question asked about court cases related to standing, a legal doctrine that describes the right to sue. The doctrine “requires that before a court will hear a case, the plaintiff must have suffered a concrete injury caused by the other party that a court can fix.”

The first case was brought by several states. They claim that their standing is based on the amount of revenue that they will lose if the Biden administration forgives student loans. The lost revenue would then be unavailable “for scholarships and other education programs meant to benefit citizens of those states.”

U.S. Solicitor General Elizabeth Prelogar’s argument was that the “state entities are not really arms of the states that they serve.” Therefore, the “states cannot sue on behalf of the agencies.” However, the conservative justices did not seem interested in Prelogar’s argument.

The second case was brought to “two borrowers who did not qualify for debt cancellation” and were not included in “the decision-making process.” Prelogar argued that the government is not required “to involve anyone in this process.” Her position was supported by the liberal justices, and some conservative justices seemed to be “more receptive to her counterargument that they did in the first case.”

The bottom line is that if “none of the plaintiffs have standing,” then the Supreme Court will not take the case regardless of whether or not Biden’s plan is legal. However, the case will continue if only one of the plaintiffs has standing.

The second important question is about merit. The outcome of this question “may depend on how the court interprets the language in the HEROES Act that empowers the secretary of education to ‘waive or modify’ the laws and regulations governing student loans.

Prelogar acknowledged that the HEROES Act does not express state that the Department of Education has “the power to cancel debt.” That did not seem to matter because “she insisted that the phrase ‘waive or modify’ is broad enough, using the terms separately or jointly, to infer that it gives the secretary the power to cancel student loans.”

According to the authors, the Biden administration and the Department of Education created the program “in secret, without public input, without consulting Congress.” In addition, “they designed the cancellation to deprive affected parties of a right to challenge this action in court.”

Chief Justice John Roberts and some of “the conservative justices were skeptical of Biden’s plan.” The justices seemed to think that Congress should manage the issue, not the executive branch. They did not seem anxious to grant more power to the executive branch. The authors concluded:

The burden of student debts was significant before this case and, sadly, it will remain so no matter how the court rules. Debt cancellation for one set of borrowers is no real solution.

But if the court determines no plaintiff has standing and declines to reach the merits, or if it defers to the secretary of education’s interpretation of the HEORES Act, we will see an ever-growing list of contested social issues addressed unilaterally by the president under the guise of an emergency.

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