When President Biden entered office, the fact that he didn’t have the authority to unilaterally cancel student loans was so uncontroversial that even Nancy Pelosi acknowledged it. “People think that the president of the United States has the power for debt forgiveness,” the then–House speaker said at a press conference in July 2021. “He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”
But Biden, eager to shore up the youth vote ahead of the 2022 midterm elections, eventually caved in to pressure from progressive activists and attempted by executive fiat to forgive $430 billion worth of student loans (which would translate into up to $20,000 per borrower). While there was no serious doubt over the fact that he lacked the authority to do this, the question was whether anybody had the ability to establish standing in court to sue, which requires a plaintiff who could demonstrate injury if the unconstitutional action were allowed to go forward. Thus, at stake in the cases challenging the student-loan-forgiveness program was not merely whether his action was unconstitutional, but whether the president could get away with a usurpation of congressional power by broadly doling out benefits without producing a legally injured party. Put more bluntly, the question was, could Biden hack the U.S. Constitution? In a 6–3 decision, the Supreme Court ruled that he could not.
While, in one student-loan case, Justice Samuel Alito wrote a unanimous decision determining that some plaintiffs (who sued because they did not qualify for the maximum relief available) lacked standing, in another majority decision written by Chief Justice John Roberts, the Court determined that at least one plaintiff — the state of Missouri — had standing. If implemented, the Biden program would cost MOHELA, a nonprofit student-loan corporation created by the state, $44 million in fees, and the justices note that MOHELA “was created by the State, is supervised by the State, and serves a public function.”
After recognizing the standing of Missouri, the Roberts majority opinion (which cites the Pelosi quote) goes on to obliterate the shoddy arguments made in favor of Biden’s sweeping student-loan-relief plan. The government had argued, absurdly, that the 2003 HEROES Act (passed in the wake of the September 11 attacks to help student borrowers who were serving in the military) provided broad authority to the administration to wipe away debt during all national emergencies. The Biden administration then tried to use the Covid pandemic as an emergency (even as Biden argued publicly that “the pandemic is over”).
More importantly, the justices determined that the HEROES Act provision that allows the secretary of education to “waive or modify” existing financial-aid programs was intended to provide leeway only for modest changes. “Prior to the COVID–19 pandemic,” the justices note, “‘modifications’ issued under the Act implemented only minor changes, most of which were procedural. Examples include reducing the number of tax forms borrowers are required to file, extending time periods in which borrowers must take certain actions, and allowing oral rather than written authorizations.” In contrast, Biden’s plan “created a novel and fundamentally different loan forgiveness program.”
The opinion also notes that “the Secretary’s invocation of the waiver power here does not remotely resemble how it has been used on prior occasions” when it was used to waive certain small legal requirements (such as a case where there was a waiver of “the requirement that a student provide a written request for a leave of absence”).
In a dissent, Elena Kagan (joined by the two other liberal justices) had the audacity to argue that “the result here is that the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness.” In reality, Biden unilaterally tried to create a nearly half-trillion-dollar federal program that did not have the votes to make it through Congress, and the Court stopped him from breaking the law.