The US Supreme Court struck down President Joe Biden’s federal student loan forgiveness plan on Friday in a set of opinions. The court’s decisions in Department of Education v. Brown and Biden v. Nebraska bring to an end a nearly year-long saga in which Biden attempted to forgive up to $20,000 in federal student loans for current and former US college students.
In a 6-3 decision in Biden v. Nebraska, Chief Justice John Roberts wrote the majority. In their arguments, the Biden administration argued the Department of Education’s plan to cancel a portion of federal student loan debt for borrowers was valid under a 2003 statute known as the Higher Education Relief Opportunities for Students Act (HEROES Act). The court found that while the act grants the Department of Education the ability to modify or waive some student loan-related provisions, it does not go so far as to allow the department to “rewrite that statute from the ground up.” In order for the government to cancel such a large sum—which the court approximates to be about $430 billion—it would need to act with express congressional approval. Since the Biden administration never obtained such express authorization, the court found the plan could not proceed.
In explaining the court’s reasoning, Roberts primarily relied upon the plain meaning of the words “waive” and “modify,” as used in the HEROES Act. The court found that Biden’s student loan forgiveness plan far exceeded the department’s congressional authority, writing:
The [department’s] comprehensive debt cancellation plan cannot fairly be called a waiver—it not only nullifies existing provisions, but augments and expands them dramatically. it cannot be mere modification, because it constitutes “effectively the introduction of a whole new regime”….And it cannot be some combination of the two….However broad the meaning of “waive or modify,” that language cannot authorize the kind of exhaustive rewriting of the statute that has taken place here.
Before reaching the court, there was also some contest as to whether or not the six states that filed suit against the Biden administration had standing—the legal right—to bring suit at all. In its opinion Friday, the Supreme Court quickly did away with such a debate, finding that at least Missouri has standing. By extension, then, the other five states also had standing in the lawsuit.
In Department of Education v. Brown, however, the court found that the individuals who brought suit lacked standing to challenge Biden’s federal student loan forgiveness plan. The court found that the individuals who brought suit, two federal student loan borrowers who did not qualify for the maximum $20,000 of forgiveness, were unable to trace their supposed injury to Biden’s plan. Plaintiff Myra Brown brought suit because she did not qualify for the plan because her student loans were held by a private, not federal, institution. And plaintiff Alexander Taylor brought suit because he only qualified for $10,000 in federal student loan forgiveness instead of the $20,000 granted to another subsection of federal student loan borrowers.
The crux of the plaintiff’s claims rested on the fact that the Biden administration failed to put their federal student loan forgiveness plan through the standard notice-and-comment period and negotiated rulemaking required for administrative actions in the US. But Justice Samuel Alito, writing for a unanimous court, stated, “It would be quite strange to think that a party experiences an…injury [which qualifies for standing] by not being affected by an unlawful action (in Brown’s case) or not being more affected by such action (in Taylor’s).” Because they failed to prove such as much, the court did not even continue to debate the merits of their arguments.
In response to the court’s two decisions, Biden said, “This fight is not over.” Friday afternoon, Biden announced he would continue to pursue federal student loan forgiveness under a different act known as the Higher Education Act. Biden stated that pursuing this path would take longer than the administration’s initial approach via the HEROES Act but called it the “best path” forward, given the court’s rulings.
Federal student loan repayments and interest have been on pause since March 2020, but they are set to restart on September 1. A December 2022 congressional report estimates that there are approximately 43 million individual federal student loan borrowers in the US. Collectively, those borrowers owe more than $1.6 trillion.
