Clarence Thomas' questions Biden admin's ability to bypass Congress in forgiving student loans

Supreme Court justices heard arguments in two cases related to Biden's student loan forgiveness program on Tuesday, which was blocked by lower courts last fall.

Hannah Nightingale Washington DC

On Tuesday, Supreme Court justices heard arguments in two cases related to Biden’s student loan forgiveness program.

First, justices heard arguments in the case of Biden v Nebraska, in which six Republican attorneys general argued that the program is a presidential overreach.

US Solicitor General Elizabeth Prelogar for the Biden administration stated that if the pause on payments is allowed to end without a plan in place, "it’s undisputed that defaults and delinquencies will surge above pre-pandemic levels."

"The states ask this court to deny that vital relief to millions of Americans, but they lacked standing to seek that result," she said.

Prelogar continued on to state that "the states say the Act doesn't authorize the Secretary to ever forgive loan principal. But the Secretary's interpretation of this text is not just a plausible reading, it's the best reading. Congress expressly authorized the Secretary to waive or modify any title for provision in emergencies to provide financial relief to borrowers."

Justice Clarence Thomas questioned how a waiver or modification could amount to a cancellation of student loans, to which Prelogar stated that the HEROES Act, put in place after 9/11, offers the education secretary actions that could be taken during a national emergency.

Chief Justice John Roberts questioned the half-a-trillion-dollar price tag for the program, asking "how does that fit under the normal understanding of modify?"

Prelogar argued that the HEROES Act, while it doesn’t explicitly state that a cancellation could occur, states that the secretary of education has the power to "waive or modify" a federal student loan program in order to ensure that individuals "are not placed in a worse position financially" because of "a war or other military operation or national emergency."

She argued that in the context of the statute, "modify has to mean making a change up to the point of wholesale elimination."

"It would be really strange for Congress to say you can eliminate obligations altogether or tweak them just the littlest bit. But you can't do anything in between," she said.

Prelogar argued that the student loan program is the administration of a benefits program, and that the federal government’s forbearance policy on student loans that have been in place since the beginning of the pandemic is an "economically significant program" that is "costing the federal government more per year than this loan forgiveness plan."

Thomas questioned Prelogar on how the cancellation of student loan debt would differ from grants Congress needs to appropriate, asking, "There's some discussion in the briefs .... that this is in effect a cancellation of a debt, that's really what we're talking about, and that as a cancellation of $400 billion in debt, in effect this is a grant of $400 billion and it runs headlong into Congress' appropriations authority."

Prelogar argued that the student loan program "doesn’t require any money be drawn from the Treasury, and so I don’t think that it strictly raises an appropriations issue."

Justice Brett Kavanaugh said Congress "could have…referred to loan cancellation" in the law, but didn’t. Instead, the administration relied on "general language" in an "old statute" to create a "massive new program."

Nebraska Solicitor General James A. Campbell argued on behalf of the six states stating that they would be economically harmed by the program, stating that "no statute authorizes this sweeping action."

Referencing Missouri’s MOHLA, the Higher Education Loan Authority of the State of Missouri which services student loans across the United States, Campbell stated that the student loan program would cut MOHLA’s revenue by 40 percent.

Justice Elena Kagan argued that if MOHLA is set up by the state, why didn’t MOHLA bring forth the lawsuit as opposed to the state, building on other justices’ arguments that since MOHLA should have brought forth the suit, the states don’t have legal standing.

"We don’t deny that MOHLA could file a suit like that, but the state’s interest is directly implicated here so it is allowed to assert the interest it has in MOHLA directly," said Campbell.

Justice Amy Coney Barrett cited a contradiction in Missouri statutes, with one section stating that the government shall not be deprived of their powers of over assets of the authority, with another stating that "no asset of the authority shall be considered to be part of the revenue of the state. So which is it?"

Campbell stated that the second section cited by Barrett is "only for a limited purpose," and that the prior section would mean that the "legislature could abolish an entity like MOHLA and if it did, the money would come back to the state so the state does have the ultimate interest in the property of MOHLA."

Barrett later added, "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?"

Campbell argued during the questioning that the HEROES Act gives the education secretary the power to modify or waive existing provisions, not to rewrite them.

"Yes it did," said Sotomayor. "The secretary can add terms and conditions to be applied in lieu of such statutory and regulatory provisions. So it's really quite clear here like you can waive or modify the old ones, and then you can add new ones in lieu of the old ones. So, you know, Congress could not have made this much more clear."

Campbell disagreed, stating that "it can’t be adding just anything the secretary wants."

He later added that he disagreed "that this is a constitutional authorization because it’s not a modification, it goes way beyond that, it creates a brand new program and that’s not what the HEROES Act allowed."

Justices then heard arguments in the case of Department of Education v Brown, in which two student loan borrowers from Texas allege that they were improperly denied the opportunity to comment on the program before its implementation, and that if they were allowed to comment, they would have urged broader eligibility criteria for greater debt relief.

Prelogar, once again representing the Biden administration, argued that the two borrowers want greater student loan relief, and yet "asked this court to hold that the HEROES Act doesn’t authorize loan forgiveness at all, when on that theory would mean that no one could get any HEROES Act relief."

Thomas asked if there are any instances in which "you would have procedural standing," in which Prelogar said if they borrowers wanted to argue that the secretary should have reconsidered broader relief, they could have raised a procedural claim and a substantive claim "because at that point, their injury would be addressable."

"But instead, their whole argument here is that the secretary can’t give them or anyone else relief under the HEROES Act."

Attorney J. Michael Connolly, arguing on behalf of borrowers Myra Brown and Alexander Taylor, stated that the "HEROES Act is the secretary’s only excuse for not adopting the program through negotiated rulemaking and notice and comment."

Connolly argued that despite Prelogar’s claims that the borrowers would remove the program for everyone, "debt forgiveness is a top priority of this administration," and an alternate program would be reached.

Justice Sotomayor said, "this is so totally illogical to me that you come into court to say I want more. I want to file a suit to get more, but I know I'm going to get nothing," who later suggested that Connolly was "fighting Congress" in their passing of the act which states no notice and comment.

"So the secretary created a massive debt forgiveness program. And he says that he's doing it one time and one time only. He said this in his brief and his declarations on its website. And in the reply brief, he said he took costs into account and so if we miss the shot, we will never have another opportunity," said Connolly.

"What are the limits of your theory? Could someone who finished paying their loans off you know, right, last year, Sue because they were disappointed that they weren't included for reimbursement?" Barrett said.

"No, I don't think so. Because there's there's no mechanism by which the Department of Education can write those borrowers a check. And so their injuries are not addressable here," Connolly responded.


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