The justices also ruled that individual borrowers who challenged the plan lacked standing to bring their case.
In a pair of recent cases, the U. S. The Biden administration’s student loan forgiveness program was decided by the Supreme Court.
In Biden v. Nebraska, which was decided 6-3, the court struck down the administration’s student loan forgiveness program and agreed with the six challenging states that they had standing to sue. Chief Justice John Roberts wrote the opinion for the majority. He was joined by Justices Neil Gorsuch, Clarence Thomas, Samuel Alito, Amy Coney Barrett and Brett Kavanaugh. Justice Elena Kagan wrote the dissent and was joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.
In the second case, Department of Education v. Brown, the court ruled that individual borrowers who challenged the plan lacked standing to bring their case. A unanimous court held that these challengers were unable to show that any injury they suffer from not having their loans forgiven is traceable to the loan forgiveness plan.
The administration’s plan to forgive student loans is not authorized by the Higher Education Relief Opportunities for Students Act (HEROES Act), the court ruled. In the event of a war, other military action, or a national emergency, the HEROES Act gives the secretary of education the authority to waive or alter the Higher Education Act’s loan forgiveness provisions. The loan forgiveness plan, according to the court, would have eliminated roughly $430 billion in student debt and reduced the median amount owed on unforgiven loans from $29,400 to $13,600.
During the COVID-19 pandemic, which was declared to be a national emergency, the Department of Education suspended student loan repayments. In August 2022, a few weeks before President Joe Biden declared the pandemic over, the education secretary received a memorandum from the Office of the General Counsel determining that the HEROES Act “grants the Secretary authority that could be used to effectuate a program of targeted loan cancellation directed at addressing the financial harms of the COVID–19 pandemic.”
A few months later, the secretary used the HEROES Act to lower or completely wipe out the majority of borrowers’ student loan debt across the country. The education secretary’s statutory authority was allegedly exceeded by the loan forgiveness plan, according to six states: Missouri, Nebraska, Kansas, South Carolina, Iowa, and Arkansas. The 8th U. S. The federal government appealed a nationwide preliminary injunction issued by the Circuit Court of Appeals.
The court decided that Missouri, among other states, had the right to object to the loan forgiveness plan. The Missouri Higher Education Loan Authority, or MOHELA, was established by Missouri as a loan servicing organization. The court concluded that MOHELA was a state agency under state supervision that would lose $44 million annually if the loan forgiveness plan moved forward. Missouri would thus experience a genuine “injury,” meeting the Article 3 standing requirements of the U S. Constitution. After standing has been established, the court can address the case’s merits.
The administration argued before the court that the secretary could cancel student loan debt under the HEROES Act because the statute only allows for changes to or cancellation of financial assistance—not a rewriting of the statute. “Statutory permission to’modify’ does not authorize basic and fundamental changes in the scheme designed by Congress,” the court explained. According to the court, “modifications imply modest adjustments to a statute, not a complete overhaul.” Additionally, because the loan forgiveness plan “specifies particular sums to be forgiven and income-based eligibility requirements,” the court rejected the argument that it waived provisions under the HEROES Act. In no meaningful way can it be said that the addition of these new and essentially different provisions is a “waiver” of the previous ones. ”.
The court also discussed the executive branch’s limitations and applied the major questions doctrine, which states that Congress must expressly state its intention before granting an administrative agency the authority to make “decisions of vast economic and political significance.” The court declared that “the ‘economic and political significance’ of the Secretary’s action is staggering by any measure,” rejecting the government’s argument that the education secretary would have such authority to rewrite the statute and erase $430 billion in student debt. The court reasoned that the education secretary was not given this authority by the Congress, which passed the HEROES Act.
In his dissenting opinion, Kagan contended that the states’ lack of standing prevented the court from considering this case at all. It is necessary for there to be a real injury in order for Article 3 standing to apply; she claimed that by hearing the case, the majority went beyond its jurisdiction. “Having no personal stake in the Secretary’s loan forgiveness plan,” are the states posing the challenge. They view the plan as a terrible idea, but that doesn’t make them any worse off because the Secretary thinks differently. These are classic ideological plaintiffs. She believes that the HEROES Act’s language clearly states that the plan is lawful. “The statute gives the Secretary broad authority to provide student loan borrowers with emergency relief, including by changing standard discharge procedures.” What the Secretary did fits comfortably within that delegation. But the Court forbids him to proceed. Similar to previous instances, the guidelines are altered when Congress passes legislation granting agencies the authority to implement significant regulatory actions. ”.
-
Contact NCSL
- Use this form to contact NCSL staff for more information on this subject.
- Full Name
- What is your role?
- Message
- Captcha
- Admin Email
FAQ
Did Supreme Court rule on student loan forgiveness?
In a pair of recent cases, the U. S. The Biden administration’s student loan forgiveness program was decided by the Supreme Court. In Biden v. In Nebraska, the court ruled 6-3 to invalidate the administration’s student loan forgiveness initiative and granted the six opposing states legal standing to file a lawsuit.
What are the new rules for student loan forgiveness for 2023?
In the spring of 2023, borrowers who have made payments for IDR forgiveness for 20 or 25 years (240 or 300 months) may be eligible to have their loans forgiven. As soon as borrowers complete the necessary number of months for forgiveness, ED will continue to discharge loans. In 2024, all other borrowers will receive updates to their loan accounts.
Is Biden’s student loan forgiveness being challenged in court?
Debt relief can move forward after the court rejects a challenge to a crucial student loan forgiveness program. Senior Contributor. I’m an attorney focused on helping student loan borrowers. A last-minute legal challenge to one of President Biden’s major federal student loan forgiveness initiatives was dismissed by a federal court on Monday.
What did the Supreme Court rule on June 30 2023?
DECISION: June 30, 2023: The Court ruled, 6-3, that Colorado could not require a website designer to create expressive designs that convey messages that the designer disagrees with because that would be against the First Amendment. Justice Neil Gorsuch wrote the majority opinion.
Read More :
https://www.ncsl.org/resources/details/supreme-court-strikes-down-student-loan-forgiveness-program
Supreme Court strikes down Biden student-loan forgiveness program