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Supreme Court's conservatives cast doubt on student loan forgiveness program

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The Supreme Court’s conservative justices cast doubt on President Biden’s student debt forgiveness plan during oral arguments on Tuesday in a pair of challenges to the administration’s relief program.

In the first case, Biden v. Nebraska, a majority of the justices appeared skeptical that Congress gave clear enough authorization for the Biden administration to forgive billions of dollars in student debt.

But conservative Justice Amy Coney Barrett joined the court’s three liberals in questioning whether a group of Republican-led states had legal standing to challenge Biden’s plan.

Conservative Justice Amy Coney Barrett (Greg Nash)

The administration has tied the plan, which forgives up to $20,000 in relief for qualifying borrowers, to the national emergency established during the pandemic.

U.S. Solicitor General Elizabeth Prelogar, representing the administration, cited the Higher Education Relief Opportunities for Students, or HEROES, Act, which was passed following the 9/11 terror attacks to aid Iraq and Afghanistan veterans, although it also applies to national emergencies.

The law gives the Education secretary authority to “waive or modify” federal student financial assistance programs “as the Secretary deems necessary in connection with a war or other military operation or national emergency.”

“We’re talking about half-a-trillion dollars and 43 million Americans. How does that fit under the normal understanding of modify?” asked Chief Justice John Roberts, who repeatedly stressed the large price tag during the argument.

Fellow conservative Justice Brett Kavanaugh cautioned, “Some of the biggest mistakes in the court’s history were deferring to assertions of executive emergency power. Some of the finest moments in the court’s history were pushing back against presidential assertions of emergency power.”

A number of justices referenced the “major questions” doctrine, which requires Congress to speak clearly when authorizing an agency to decide matters of vast economic and political significance.

Prelogar conceded that the plan is politically significant, but she argued that Congress in passing the HEROES Act foresaw the Education secretary discharging debt during times of national emergency. 

Justice Sonia Sotomayor pushed back on Roberts’s balking at the plan’s price tag, noting the lack of legal challenges when the Biden and Trump administrations used HEROES Act authority to pause student debt payments.

“The forbearance of pay is $5 billion a month or something like that?” asked Sotomayor. “It’s an outrageous sum, and yet no one is disputing that. The secretary has that power. It’s not the amount of money, the question is what’s Congress’s intent?” 

Supreme Court justices Sonia Sotomayor and Elena Kagan (AP Photo/Win McNamee)

Justice Elena Kagan similarly said, “Congress could not have made this much more clear,” while conservatives including Justice Clarence Thomas noted that other provisions explicitly grant the department authority to discharge debt.

Although the court’s conservative majority appeared deeply skeptical on the merits of Biden’s plan, the case is likely to turn on whether the states had legal standing, meaning the capacity to sue.

Much of that debate focuses on the plan’s purported financial harm to the Higher Education Loan Authority of the State of Missouri (MOHELA), one of the nation’s largest student loan servicers, and if it gives Missouri standing to bring the challenge.

Nebraska Solicitor General James Campbell, representing the states, argued Missouri speaks for the loan servicer. Even if it didn’t, Missouri would be harmed if MOHELA loses revenue and can’t make payments it owes to the state, he said.

“The state has not pressed MOHELA to put money into the fund,” countered liberal Justice Ketanji Brown Jackson, noting that the loan servicer has already extended the timeline for making payments it already owes.

Barrett and the court’s three liberals noted that Missouri law immunizes the state from being responsible for MOHELA’s debts and probed as to why MOHELA itself did not bring the suit.

“Why didn’t you just strong-arm MOHELA?” asked Barrett.

Sotomayor said, “It would be odd for us to have a state say, ‘We’re creating a corporation. We’re not going to be responsible for its debts. We’re not going to be responsible for any of its contracts. We’re not going to be responsible for anything that does financially.’ And the state itself says this is not the state, it’s an independent corporation. And we’re going to say instead, that it is the state?”

The justices also heard a second challenge to the debt relief, Department of Education v. Brown, in which two individual challengers who did not qualify for the full $20,000 in relief similarly asserted that the Biden administration overstepped its authority.

In those arguments, the conservative justices focused on the fairness of the program to those who did not qualify, and if the debt relief was a necessity. 

“Why is it fair? If it was — if you didn’t have to do it? Why is it in the answer to say that it was warranted? Maybe it was warranted, but why was it done? I guess you don’t want to answer the question,” Alito told Prelogar.

Prelogar emphasized the millions of borrowers who would receive debt relief from the program and data from the government showing that without the relief, there would be a surge of defaults and delinquency on student loans. 

The liberal justices hammered the challengers’ claim that the Department of Education had to give a notice-and-comment period for the debt relief. 

“The HEROES Act specifically says no notice and comment. No negotiated rulemaking, specifically — says there’s going to be an emergency. So we’re waiving those procedural requirements. So, you know, you might think that Congress made a wrong call there. But that’s Congress’s call,” Sotomayor said. 

Decisions in both cases are expected by late June.

—Updated at 2:24 p.m.


Source: The Hill

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