The Supreme Court on Friday struck down President Joe Biden’s student-loan-forgiveness program, finding that the statute the administration relied on in issuing the executive order does not give the secretary of education sweeping authority to forgive billions in student loans for tens of millions of Americans.
In the first of two cases, Justice Samuel Alito wrote for a unanimous Court that the individual plaintiffs lacked standing to sue because they failed to establish injury. But in the second case, the Court ruled 6-3 that the state of Missouri, at the very least, had standing to sue and convincingly argued that President Biden lacked the authority to forgive student loans for entire categories of borrowers under the HEROES Act of 2003.
The Court’s precedent “requires that Congress speak clearly before a department secretary can unilaterally alter large sections of the American economy,” Chief Justice John Roberts wrote for the majority.
In August of last year, the Biden administration announced an executive order that would cancel up to $20,000 in federal student-loan debt for those making less than $125,000 in income per year. The administration invoked the HEROES Act to justify the plan. It was the same statute that was invoked by former president Donald Trump’s education secretary, Betsey DeVos, to pause student-loan payments as well as the accrual of interest early in the pandemic.
The Biden administration argued that the Education Department under Miguel Cardona acted within the bounds of the statute. The six Republican-led states who challenged the program argued that Congress did not give the executive branch the power to enact such a major debt-relief program and that there is little evidence that all recipients of student loans are in a worse financial position due to the pandemic. They also claimed the program was arbitrary and capricious, as more incremental relief was not considered.
“The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not,” wrote Roberts. “We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”
“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,” Roberts added.
The chief justice also cited a statement made by then-Speaker Nancy Pelosi (D., Calif.), who in 2021 insisted that President Biden could not exercise executive authority in the name of “debt forgiveness.”
“People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress,” the California Democrat said during a press conference in July 2021.
Writing in dissent, Justice Elena Kagan argued that the Supreme Court had dramatically overstepped in its ruling: “In every respect, the Court today exceeds its proper, limited role in our Nation’s governance.”
“From the first page to the last, today’s opinion departs from the demands of judicial restraint. At the behest of a party that has suffered no injury, the majority decides a contested public policy issue properly belonging to the politically accountable branches and the people they represent,” Kagan added in her concluding remarks.
She was joined by Justices Sonia Sotomayor and Kentanji Brown Jackson.
It was thought standing would be a difficult hurdle for the six states, especially considering Justice Amy Coney Barrett’s apparent skepticism during oral arguments, but the majority ruled that the injury was not speculative, as the administration had argued.
Barrett, who joined the majority, wrote separately in a concurrence on the major questions doctrine, which was invoked by Roberts and is the idea that if Congress wants agencies to make decisions of vast economic and political significance, it must clearly authorize them to do so. Barrett argued that the doctrine is consistent with textualism if used as a tool to discern “the text’s most natural interpretation.”
The Covid-19 pandemic ended in May and the Biden administration announced student-loan payments would resume after the summer, later codified in the debt-ceiling deal. The Department of Education confirmed that interest would start accruing in September and payments would resume in October.