By Thomas Ascik|March 2nd, 2023|Categories: Congress, Constitution, Education, Supreme Court
President Joseph Biden’s creating and inserting of his student loan forgiveness program, which his Department of Justice solicitor general accurately just called a “benefit” program, into last fall’s midterms elections received a thorough hearing in the Supreme Court on Tuesday. In defense of the program, the government’s case turned on what statutory words normally mean and the government’s attempted re-meaning of them.
The Biden Administration’s case is based most fundamentally on arguing that the two sets of plaintiffs, individuals and a group of states, in the two cases do not have standing to challenge President Biden’s student loan forgiveness program. In addition, the government invokes the HEROES Act, which was enacted by Congress in 2003 after the attack on the World Trade Center. That Act reduced the student loan obligations under federal student loans of military service members during war, military operations, disaster area, or in a “national emergency.” The Act grants the Secretary of Education substantial authority to “waive” or “modify” various provisions, obligations, and payment schedules but includes no authority to “cancel” or “forgive” the loans. The administration maintains that the Covid pandemic is a continuing “national emergency” and that cancellation of the loans includes elements of both waiver and modification. The twin cases heard by the Court were Biden v. Nebraska and Department of Education. v. Brown.
Are trillions of dollars “major” expenditures?
In their briefs—as well as in the large number of amici briefs—both the states in the Nebraska case and the individuals in the Brown case argued that the 6-3 decision of the Supreme Court last year in West Virginia v. EPA required the overturning of the Biden student-loan initiative. In that case, the Court cited some precedents but developed as never before “the major question doctrine.” Chief Justice John Roberts authored the majority opinion, and Justice Neil Gorsuch with Justice Samuel Alito wrote a vigorous concurring opinion. It might be said that the doctrine requires that amidst statutory and regulatory constructions that the big picture be never obscured or ignored. In West Virginia, the Court ruled that the Environmental Protection Agency (EPA) could not employ a rarely cited provision of the Clean Air Act to impose new standards for carbon-dioxide emissions. When an agency cites statutory authority for its actions, “something more than a merely plausible textual basis for the agency action is necessary.” The agency instead must point to “’clear congressional authorization’ for the power it claims.” Roberts said.
In the Nebraska case, Chief Justice Roberts joined by Justice Alito engaged in a spirited exchange with Solicitor General Elizabeth Prelogar about how “major” the student-loan program is.
Avoiding the use of the word “major,” Solicitor Prelogar answered Justice Sonia Sotomayor’s question concerning whether a quarter or half a trillion dollars was a “major question,” by conceding that the case involved “an economically significant action.” She also just about answered that the spending trillions of dollars was somewhat normal these days. Further, Solicitor Prelogar argued that the doctrine of the major question had arisen in the context of executive regulatory authority in the West Virginia case, and she then averred that what was going on here in the student-loan case was the awarding of government benefits, not regulation. Justice Alito forced her to admit that the spending of trillions, “a trillion dollars here, a trillion dollars there,” is regarded within and by the Congress as a “major policy.”
The government maintained that the executive act of the Secretary of Education establishing the loan forgiveness program at the end of August 2022 followed was justified by the two words, “waive” and “modify,” in the language of the Heroes’ Act, and Justice Clarence Thomas asked Solicitor Prelogar “is this a waiver, or is it a modification?” She replied that “it’s both a waiver and a modification.” She then became almost metaphysical about “how the [two] verbs map onto the Secretary’s action,” waiving some requirements and modifying some provisions. To which Justice Roberts asked how “half a million dollars and 43 million students” fits under “the normal understand of modifying?”
The plaintiffs in the two cases, both states and persons, objecting to the cancelling of the student loans, argued that even though the Heroes Act gave the Secretary of Education statutory authority to “waive” or “modify” some of its provisions, “cancelling” loans was different in kind and magnitude from those two powers: the Secretary did not have “clear congressional authorization for the power,” he claimed.
Will the cases end only as procedure?
However, the plaintiffs in both cases could lose on the issue of standing; that is, if the Court decides that they failed to prove that the student loan cancellations had caused them to suffer the necessary injury that allowed them to be in court. Along with arguing that the text of the Heroes Act allowed for ample authority for the loan cancellations, attacking the standing of the plaintiffs was the chief strategy of the government. Justices Elena Kagan, Sotomayor, and Ketanji Brown Jackson agreed with her. Justice Barrett seemed to have some inclinations to join them. If she voted against standing of the plaintiffs, the government would need only one more vote to throw the cases out of court.
In truth, there are bona fide questions about the standing of the plaintiffs. In the Nebraska case, the attorney general for the state of Missouri, the remaining state plaintiff to have been the subject of a definitive ruling in the courts below, defended the standing of his state to be in court. For, the Missouri agency directly affected by the effects of the loan cancellation would have on university finances in Missouri, although set up by the state, is not a state government agency. That independent agency services federal student loans. The government forcibly argued that the independent agency, not the state, should have been the plaintiff, and that the state should be out of court.
The two individual plaintiffs in the Brown case have outstanding federal student loans. One is eligible for forgiveness on only half of his loan, and the other is not eligible for forgiveness at all because her loan is held by a commercial entity, not the federal Department of Education. These two plaintiffs argue that the Secretary deprived them of their opportunity to participate in the loan cancellation program because the Department did not include the normal opportunity for notice and comment required by federal administrative law. The government’s answer is that the loan cancellation is a special “benefits” program, not executive rulemaking subject to formal public procedures. And such governmental benefits programs are targeted to specific people and specific purposes. The fact that the two plaintiffs were not intended beneficiaries means that they do not have standing in court to challenge the loan cancellation program, the government maintains.
The two plaintiffs make a plea for fairness. They want same “opportunity” others have “to obtain tens of thousands of dollars in debt forgiveness,” and they were deprived of a “fair warning” to be heard about their possible eligibility for loan forgiveness because of the irregular way in which the Department proceeded. they say in their brief. They ask why fairness, which have would been considered by Congress if the loan forgiveness program had originated there where it should have originated, should not be a “consideration under the major question doctrine,”
Chief Justice Roberts, joined by Justice Alito, took up their cause in oral argument. Solicitor Prelogar addressed this question by asserting that the Congressional concern for fairness together with the Secretary’s discretion to act upon it was built into the language of the Heroes’ Act—the decision to waive or modify includes a decision about fairness. It was “inherently an aspect of what Congress authorized” and essentially passed on to the executive branch. Justice Alito followed by asking that if the Secretary had authority over the inclusiveness of the program, why had he not or could he have been more inclusive? Solicitor Prelogar did not answer, except to say again that it was in the Heroes’ statute. Justice Sotomayor backed up Solicitor Prelogar by pointing out that every law includes limitations. And Justice Jackson agreed that “the same fairness issue” affects “any federal benefit program.” Justice Gorsuch, nonetheless, got Solicitor Prelogar to concede that it would be fair for the Court to consider fairness in its decision.
A political case
In her opening and especially in her final remarks at the end of the 3.5 hours of argument in the two cases, Solicitor Prelogar dropped all pretense of legal argumentation and advanced an emphatically political and legislative—not to mention guilt tripping and “fair”—justification suitable for media-based public advocacy and the floors of Congress:
Ninety percent of the borrowers covered by this plan make less than $75,000 a year and the Secretary documented the extreme impacts that COVID had had on their financial affairs. Already, 26 million people have applied for this relief, and 16 million people have been approved to receive it. For those Americans, this is a critical lifeline to ensure that they are not subject to the severe negative consequences of delinquency and default on student loan debt. And the relief for these Americans has been held up by two student-loan borrowers who don’t even have standing and whose claims fail on the merits. So we’d urge you to reject their claims.
Where was Congress?
With its constitutional “’power of the purse,” the one undeniable party to the case was the Congress. But the case matured and was scheduled for oral argument while Democrats were in control of both houses of Congress. On February 3, forty-three Republican senators and 128 Republican members of the House did file briefs, as amici, but not as parties, defending Congress’ authority over the purse. It might have been interesting for those Congressional Republicans to have filed as parties and demanded oral-argument time. The Biden student-loan program to “unilaterally erase roughly half a trillion dollars in debt owed to the United States” was a “clear arrogation of the legislative power” by the executive, the brief of the Republican Senators argued. The so-called “major question doctrine,” a judicially created doctrine, only indirectly reaches this more fundamental constitutional principle of the separation of powers.
