Lawyers and Justices Spar Over Student Loan Forgiveness in Supreme Court

The court's conservative majority probed both sides' arguments

US Supreme Court building

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In a Supreme Court hearing Tuesday on the fate of President Joe Biden’s $400 billion student loan forgiveness program, justices showed skepticism about whether the sweeping program exceeds the president’s authority, even as they asked pointed questions about whether its opponents have the right to challenge it.

Justices questioned lawyers for the Biden administration and those trying to overturn the program: six states including Nebraska and Missouri, and separately, two student loan borrowers excluded from the full benefits of the loan forgiveness.  The court grappled with whether the Department of Education had gone beyond its authority in authorizing broad student loan forgiveness and whether those suing to stop the program have standing, or the right to have the court rule on the program’s legality in the first place.

The justices questioned the lawyers on whether the language of the HEROES Act of 2003 authorizing the Secretary of Education to “waive or modify” provisions of student loan programs was enough to allow the discharge of debt. They also asked whether the states had standing, and whether the program was fair to people who never went to college. 

Luke Herrine, a law professor at the University of Alabama School of Law, said the justices' questions suggested the Biden administration had a better day in court than he had expected. The liberal justices sounded united in support of the administration's arguments, while two of the conservative justices, Amy Coney Barrett and Brett Kavanaugh, didn't seem convinced that the states had standing, giving loan forgiveness a plausible path to at least a 5-4 victory.

"I think it's very possible that the Biden administration could win this case, either on standing or on the merits, although I think standing is the most likely," he said.

Still, the government's case ran a gauntlet of criticism from some of the conservative judges.

Chief Justice John Roberts, an appointee of Republican George W. Bush and a member of the court’s conservative majority, said the program seemed to stretch the definition of the word “modify.” 

“It might be good English to say that the French Revolution ‘modified’ the status of the French nobility, but only because there's a figure of speech called understatement and a literary device known as sarcasm,” Roberts said. 

Elena Kagan, an appointee of Democrat Barack Obama, offered a different interpretation, saying loan forgiveness was within the broad scope of the statute’s language. 

“Congress could not have made this much more clear,” she said. 

The justices butted heads later, when Roberts questioned why the law helped people who took out loans to go to school rather than those who took out loans to start lawn businesses. 

“Congress passed a statute that dealt with loan repayment for colleges and it didn’t pass a statue for loan repayment for lawn businesses,” Kagan replied a few minutes later. “That may have been the right choice or it may have been the wrong choice, but that's Congress's choice.”

Justices spent much of the hearing probing the issue of whether student loan servicer MOHELA’s status as an independent state agency gave Missouri the right to sue on its behalf, or whether its independent status meant that it had to sue on its own if it wanted its interests represented in court. Solicitor General Elizabeth Prelogar, representing the Biden administration and the Department of Education, said student loan servicers, who make money from the federal student aid program, would have standing to challenge loan forgiveness but have opted not to.  

The court’s ruling, which could come as late as early July, will determine whether Biden’s plan to forgive up to $20,000 of federally-held loans per borrower, will be allowed to proceed. The White House estimates 40 million people are eligible, with 20 million in line to have their loan balances completely wiped out. 

Legal experts have said the Biden administration faces an uphill battle persuading the court’s conservative majority to uphold the student loan forgiveness program. The court has so far been hostile to government agencies using their powers in new ways to combat the pandemic. In 2021, the court blocked a nationwide ban on evictions and in 2022 struck down a vaccine mandate for large employers, both of which Biden had justified by the public health threat posed by COVID-19. The court did, however, uphold a narrower vaccine mandate for healthcare workers. 

Prelogar said Congress had given broad authorization to the department to forgive student loans when it passed the HEROES Act. Nebraska’s solicitor general, Jim Campbell, said the loan forgiveness program was so sweeping in its scope and so costly that it went beyond what lawmakers had intended when they passed the law. 

Prelogar also challenged the states’ standing to bring the suit in the first place, arguing that they  could not demonstrate they would be harmed by the forgiveness going into effect. The states said Missouri would be harmed because MOHELA, a student loan servicing authority, was created and controlled by the state. Prelogar countered that MOHELA, an independent corporation, could have sued itself if it wanted to, and legal principles prevented the state from suing on behalf of a third party.

Update, Feb. 28, 2023- This article was updated after publication to include analysis by Luke Herrine.

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