Student loan Forgiveness Scheme: President Biden’s expansive plan to eliminate student loan debt is set to be discussed this week in front of the Supreme Court which is skeptical of Biden’s bold assertions of power. It’s an almost half-trillion-dollar battle that could affect the lives of more than forty million Americans.
The arguments heard on Tuesday will bring together a number of burning topics: an ambitious plan designed to fulfill the campaign pledge of Biden’s supporters; an increase in concerns raised of members of the conservative Supreme Court supermajority regarding the power for federal authorities to take action without authorization from Congress as well as the ability of states controlled by Republicans to make use of the judiciary to block the president’s agenda before they are implemented.
“Canceling hundreds of billions of dollars in student loans — through a decree that extends to nearly all borrowers — is a breathtaking assertion of power,” Nebraska Attorney General Michael T. Hilgers (R) notes in a court filing that he filed on his behalf and five other states with Republican leadership.
Supreme Court hears arguments regarding Biden’s student loan forgiveness scheme
The Secretary of Education Miguel Cardona says the administration has the power to release student loan debts under the Higher Education Relief Opportunities for Students Act of 2003. The law allows the secretary to modify or waive loan conditions in the case of national emergencies which is in this instance the outbreak of coronavirus.
Cardona suggested a plan that could eliminate up to $10,000 in student loans for those who earn up to $125,000 per year and the maximum amount of $250,000 for married couples. The students who received Pell Grants which is a type of financial aid for middle and low-income students can receive an additional $10,000 of forgiveness. A total of 20 million borrowers may see their debts cleared.
U.S. Attorney General Elizabeth B. Prelogar, who will defend the program of the administration in the Tuesday hearing claims that the actions of Cardona are not just based on laws, but they’re exactly what Congress was thinking of when it adopted the HEROES law in the aftermath of the 9/11 terrorist attacks.
“The Secretary’s interpretation is not just a plausible reading of the statute; it is the best reading,” Prelogar said in a letter for the justices. “The Court should reject respondents’ distortion of the Act and their effort to deny student-loan borrowers the relief that Congress authorized and that the Secretary deemed essential.”
He got the loan as a student in 1977. In the present, he’s barely scratched the principal.
But the track record of the administration on the court, which has been strengthened in recent years by justices appointed by Trump as president Donald Trump who are more conservative than their successors isn’t encouraging for the president.
Court has lifted the ban on evictions of rental tenants implemented in the Centers for Disease Control and Prevention. It threw out a coronavirus vaccination-or-testing mandate imposed on large businesses by the Occupational Safety and Health Administration. In a decision that was not related to the pandemic, the agency cited the “major questions” doctrine to limit the “major questions” doctrine to restrict options of the Environmental Protection Agency to combat climate change.
The doctrine that Supreme Court Justice John G. Roberts Jr. wrote in his EPA opinion addressed “a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”
In that sense, many experts believe that the administration’s best chance to win the student loan program would be convincing the courts that neither Republican-controlled states or two individuals in a separate instance from Texas have the legal right to contest the plan. This would free the court from having to decide on the issues in the case.
In order to be able to challenge the loan-forgiveness scheme, plaintiffs must prove that they experienced a specific instead of a generalized injury that is able to be addressed through an order from the federal court. In this instance, it’s not enough to simply protest against the scale of the program or to assert that the president has abused his power.
An appeals panel in the U.S. Court of Appeals for the 8th Circuit gave the states the opportunity to keep the suit after finding the Missouri Higher Education Loan Authority which is a quasi-independent body, might suffer losses due to the changes to the program that could be detrimental to Missouri as one of the states that is a challenger. Another court ruled that two applicants, Myra Brown and Alexander Taylor are able to pursue the case. Taylor isn’t eligible for the amount of forgiveness of $20,000, however, Brown isn’t eligible for forgiveness at all.
As part of her argument, Prelogar vigorously protested against both rulings. In her brief, the Missouri lending authority, which is an independent entity of the state in a variety of ways, she said and decided not to pursue the matter on its own behalf. The lawsuit brought by Brown and Taylor will not be beneficial to them instead, it would ensure the situation so that nobody gets benefits from the program to forgive loans Prelogar stated in her article.
The issue of who has standing to challenge the actions of the president has been a part of the debate over the plan since Cardona made it public, and has sparked a heated debate in the amicus briefs that have been filed on the matter.
The law professors Samuel L. Bray and William Baude, from the University of Notre Dame and the University of Chicago, respectively and say they’re opposing the program to forgive loans. They do however say that the court should drop the two cases, saying that neither plaintiff has sufficient standing to bring legal challenges.
Below is a breakdown by state of who’s in the process of applying for relief from student loan debt.
Even when the executive branch may have overstepped it’s authority, they note in their brief “that does not permit the judicial branch to exceed its authority.” They also noted that the partisan battles over presidential authority have become routine.
“When a Republican administration is in power, attorneys general from Democratic states line up (most often as a group) to challenge any politically controversial act by the federal government; and when a Democratic administration is in power, the roles are reversed,” Bray and Baude declare in their court papers. Republican attorneys general have initiated more than fifty lawsuits in opposition to the Obama administration. Democratic attorney generals filed more than 130 lawsuits against the Trump administration. Republican states attorneys general filed over fifty lawsuits in opposition to Biden in his first two years as president.
Some say what’s equally concerning, however, is an administration that has exceeded its powers and seeking to design a program to thwart any opposition.
Since the day Biden won the election, many activists as well as some congressional Democrats have been on a campaign to convince Biden to honor his pledge to eliminate at least a part of the $1.6 trillion of federal student loans.
Biden instructed the Justice and Education Departments to prepare memos regarding his power as an administrator to forgive loans, however, he expressed doubt. Senate Majority Leader Charles E. Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.) as well as Rep. Ayanna Pressley (D-Mass.) They were insistent they believed Biden could utilize the same authority to erase debts that the Trump administration utilized to temporarily suspend student loan obligations during the pandemic. This suspension has been repeated and is still in effect today.
Other Democrats were not so sure. Then, in July of 2021 House Speaker Nancy Pelosi said, “People believe they are right that President Obama of the United States has the power to grant debt forgiveness. It’s not true … It must be a decision from Congress.”
However, the Biden administration found the authority to grant the power in the HEROES Act, which permits the secretary of education in order to “waive or modify any statutory or regulatory provision applicable” to federal student loan programs. The law allows for the department to aid those who were affected by an emergency in the country and ensure that they are “not placed in a worse position financially” in relation to their loans.
A brief submitted by 43 Republican senators stated that it does not grant permission to help make loan holders better off and the Biden administration profited from an emergency situation in the country.
“The President is not a king, and he has no power to dispense with the lawful acts of the legislature,” senators submitted in their brief. “Though the Administration has structured, and even amended, the Cancellation Program in a cynical effort to avoid judicial scrutiny of its arrogation of legislative power, those efforts should not succeed.”
A document submitted by Republican former attorneys general, judges, and other officials states that allowing this program to continue could jeopardize an effective separation of power.
“This represents one of the largest expenditures in the nation’s history, carried out in the face of clear congressional opposition and supported by no accepted principles of statutory interpretation — let alone the specific statement that is necessary before the executive branch can spend Treasury funds,” was the argument in the brief filed in the name of former judge Michael McConnell and former attorney general William P. Barr, as well as others.
Prelogar provides answers to each charge. The amount of money spent is estimated to be $430 billion merely an expression of the issue to be resolved: “the federal student-loan portfolio (approximately $1.63 trillion), the number of borrowers (approximately 43 million), and the unprecedented scope of the once-in-a-century COVID-19 pandemic (which has triggered over $5 trillion in government spending on other relief measures).”
She describes the argument Biden made to use to justify the spread of the disease as a way to keep a campaign promise to fulfill a campaign promise as “based on legally irrelevant political statements that cast no doubt on the [Education] Secretary’s stated rationale.”
In addition, she observes that there was no objection to suspending payments that was first implemented in the Trump administration. This strategy “was adopted in 2020, effectively ratified by Congress, carried forward across two administrations for three years, and never questioned by any court.”
In addition, in her letter, “a three-year suspension of interest accrual could be worth significantly more than the plan’s $10,000 forgiveness.”
Legal battles have put millions of students in uncertainty. Over half of those who were eligible had applied for forgiveness before it was stopped by courts and it the Education Department approved some 16 million applications. The department has assured the borrowers that it will pay the debt in the event of a victory in court.