Supreme Court conservatives take skeptical view of Biden student debt forgiveness - ABC News | By The Perfect Enemy

The Supreme Court’s conservative majority on Tuesday appeared deeply skeptical of the legality of a White House plan to forgive $400 billion in federal student loans during the pandemic, even as the Biden administration vigorously defended its power and attacked the ability of six states to block it.

Oral arguments in a pair of cases challenging the Biden plan, which remains on hold pending the litigation, stretched well past their scheduled two hours, as the justices wrestled with key questions of legal standing and legal authority under a 2003 education law.

The court’s conservative justices seemed most concerned about the scope and scale of the administration’s action, which was not specifically authorized by Congress.

“We’re talking about half a trillion dollars and 43 million Americans,” said Chief Justice John Roberts. “I think most casual observers would say, if you’re going to give up that much amount of money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on.”

After the relief program was announced in August 2022, more than 26 million Americans signed up; 16 million were approved for relief before federal courts put it on hold pending the litigation, according to the White House. More than 90% of the financial benefit would accrue to individuals making less than $75,000 a year, an administration official said.

Student loan borrowers and advocates gather for the People’s Rally To Cancel Student Debt during the Supreme Court hearings on student debt relief on Feb. 28, 2023, in Washington, D.C.

Jemal Countess/Getty Images for People’s Rally to Cancel Student Debt

“In effect, this is a grant of $400 billion,” posited Justice Clarence Thomas, “and it runs headlong into Congress’ appropriations authority.”

Justice Samuel Alito suggested it’s unlikely Congress could have imagined implicitly authorizing a plan of such a large scale. “A trillion dollars here, a trillion dollars there, it doesn’t seem very sensible,” he said. “Is this the sort of thing Congress is likely to address expressly?”

“Congress did address this expressly here,” replied Solicitor General Elizabeth Prelogar, arguing for the Biden administration. She said the HEROES Act, which Congress approved 20 years ago, explicitly grants the Education Secretary authority to “waive or modify” the terms of existing federal student loans during a national emergency.

“It’s perfectly logical for Congress to broadly empower the executive to provide benefits, especially in a crisis situation or an emergency like we’ve seen with COVID-19,” Prelogar said. The administration says financial fallout from the COVID pandemic had “profound” effects on student borrowers.

“This is not a situation where the secretary is acting outside the heartland of his authority,” she said. “This is the student loan program. That falls within the wheelhouse of the secretary of education.”

The three liberal justices relentlessly zeroed in on the legal standing of six GOP-led states suing the administration, suggesting none would suffer direct harm from federal loan cancellation and therefore have little grounds to sue.

In this Aug. 24, 2022, file photo, President Joe Biden announces student loan relief, in the Roosevelt Room of the White House in Washington, D.C.

Olivier Douliery/AFP via Getty Images, FILE

The court’s precedents say a plaintiff must suffer an “injury in fact” directly flowing from a policy or program in order to challenge it in court.

“We really do have to be concerned about jumping into the political fray, unless we are prompted to do so by a lawsuit that is brought by someone who has an actual interest,” said Justice Ketanji Brown Jackson, who suggested the alleged harm to states was “attenuated.”

Jackson added that she “worries” about the government’s ability to operate if states can sue over the “most minor state interests.”

A key focus of the questions on standing was the state of Missouri, home to the nation’s largest loan servicer, the Missouri Higher Education Loan Authority, or MOHELA. It alleges that eliminating loans on the company’s books would in turn harm its ability to contribute student aid to Missouri.

“About half of MOHELA’s operating revenue from direct loans will be cut and overall that amounts to about forty percent of its operating revenue,” said James Campbell, Nebraska’s solicitor general, arguing on behalf of the states. “The state’s interest is directly implicated.”

“MOHELA is not here, General Crawford [sic]; isn’t that correct?” responded Justice Elena Kagan. “Usually we don’t allow one person to step into another’s shoes and say I think that that person suffered a harm, even if the harm is very great.”

Added Justice Sonia Sotomayor: “It’s hard to imagine how the state of Missouri can claim an injury … when it’s not responsible for the debts of MOHELA.”

Justice Amy Coney Barrett appeared to share some of the concerns about standing related to MOHELA, which is notably not a party to the case.

“If MOHELA is an arm of the state, why didn’t you just strong-arm MOHELA and say you’ve got to pursue this suit?” Barrett asked skeptically.

Justices of the U.S. Supreme Court pose for their official photo at the Supreme Court in Washington, D.C., Oct. 7, 2022. Standing, from left: Amy Coney Barrett, Neil Gorsuch, Brett Kavanaugh and Ketanji Brown Jackson. Seated from left: Sonia Sotomayor, Clarence Thomas, Chief Justice John Roberts, Samuel Alito and Elena Kagan.

Olivier Douliery/AFP via Getty Images

A second, related challenge to the Biden debt forgiveness plan, brought by two individual borrowers who are ineligible for relief, accuses the administration of acting arbitrarily without sufficiently considering the interests of all Americans as required by law.

While federal law ordinarily requires a public “notice and comment” period for significant regulatory changes, the administration argues emergency circumstances allowed them to bypass that process.

Justices Neil Gorsuch and Brett Kavanaugh suggested the administration overlooked questions of fairness.

There may be “deficiency” for not considering costs to “in terms of fairness, for example, people who have paid their loans, people who don’t — plan their lives around not seeking loans, and people who are not eligible for loans in the first place,” Gorsuch said. “I didn’t see anything in the [secretary’s] memorandum that dealt with those kinds of questions.”

“There are going to be winners and losers, and that raises similar questions about individual rights, individual liberty,” said Kavanaugh.

Justice Alito added: “Why is it fair to the people who didn’t get comparable relief?”

“Congress has made the judgment that when an emergency affects borrowers in this way, the secretary can provide relief,” Prelogar said.

A decision in the cases is expected by the end of June.

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Published on The Perfect Enemy at https://bit.ly/3IC15cQ.