The Supreme Court issued rulings today in two cases presenting challenges to the Biden administration’s student-loan cancellation program. In Department of Education v. Brown, the Court in a unanimous opinion by Justice Alito ruled that two individual borrowers lacked standing to bring their challenge. But in a momentous ruling in Biden v. Nebraska, Chief Justice Roberts penned a majority opinion for six justice that ruled that the cancellation was unlawful.
I’ll provide here a quick summary of the Chief’s opinion. (I’m drawing as much as I can directly from the opinion, but I am not cluttering my summary with quotation marks.)
1. Missouri has standing to challenge the cancellation. (Pp. 7-12.) Missouri created a nonprofit government corporation, MOHELA (Missouri Higher Education Loan Authority), to participate in the student-loan market. MOHELA is an instrumentality of Missouri: It was created by the State to further a public purpose, is governed by state officials and state appointees, reports to the State, and may be dissolved by the State. The Secretary’s plan will cut MOHELA’s revenues, impairing its efforts to aid Missouri college students. This acknowledged harm to MOHELA in the performance of its public function is necessarily a direct injury to Missouri itself. See Arkansas v. Texas (1953).
It’s insignificant that MOHELA has a legal personality separate from the state. That’s true of every government corporation. It nonetheless remains part of Missouri, as two of our Amtrak precedents establish.
That MOHELA could have sued in its own name doesn’t mean that Missouri can’t sue on its behalf. Where a state has been harmed in carrying out its responsibilities, the fact that it chose to exercise its authority through a public corporation it created and controls does not bar the state from suing to remedy that harm itself. See Arkansas v. Texas (1953).
2. The Secretary of Education’s authority to “waive or modify” existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act does not grant him authority to cancel $430 billion of student loan principal. (Pp. 12-18.)
Statutory permission to “modify” does not authorize “basic and fundamental changes in the scheme” designed by Congress. Instead, that term carries “a connotation of increment or limitation,” and must be read to mean “to change moderately or in minor fashion.” MCI v. AT&T (1994).
The Secretary’s plan has “modified” the cited provisions only in the same sense that “the French Revolution ‘modified’ the status of the French nobility”—it has abolished them and supplanted them with a new regime entirely. [Quoting Scalia in MCI.]
As for “waive”: The Secretary does not identify any provision that he is actually waiving. The Secretary’s comprehensive debt cancellation plan cannot fairly be called a waiver—it not only nullifies existing provisions, but augments and expands them dramatically.
3. The Secretary’s appeal to congressional purpose does not enable him to elide the statutory text. (Pp. 19-25.)
The dissent would give unlimited power to the Secretary. The question here is not whether something should be done; it is who has the authority to do it. The Secretary’s claim of unlimited power would effect a fundamental revision of the statute on a matter of staggering economic and political significance. A decision of such magnitude and consequence on a matter of earnest and profound debate across the country must rest with Congress itself, or an agency acting pursuant to a clear delegation from that representative body. West Virginia v. EPA (2022) (“major questions” doctrine).
The dissent is correct that this is a case about one branch of government arrogating to itself power belonging to another. But it is the Executive seizing the power of the Legislature.
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Justice Barrett, in a 16-page concurring opinion that I have not had time to read, defends the “major questions” doctrine as “a tool for discerning—not departing from—the text’s most natural interpretation.”
Justice Kagan, in a 30-page dissent that I also have barely skimmed, contends that the majority distorts standing doctrine and “appl[ies] the Court’s made-up major-questions doctrine to jettison the Secretary’s loan forgiveness plan.” (On this latter point, the Chief aptly responds that his major-questions discussion supplements his conclusion that the “statutory text alone precludes the Secretary’s program.”)