Biden v. Nebraska, 600 U.S. __, No. 22-506 (June 30, 2023)

The Supreme Court recently ruled that the Biden administration overstepped its authority when it announced that it would cancel up to $10,000 of certain individuals’ student loans (and for some , up to $20,000), a plan that would have provided relief to approximately 43 million Americans. The AAUP joined the American Federation of Teachers (AFT) and the American Federation of State, County, and Municipal Employees (AFSCME) in filing an amicus brief, arguing that the proposed plan was a lawful exercise of authority granted by the HEROES Act, a law passed in the wake of the September 11 attacks, and highlighted the impacts that the COVID-19 pandemic has had on teachers, nurses, and other student borrowers. In its decision, the court held that the HEROES Act, despite giving the secretary of education the power to “waive or modify” any statutory or regulatory provision relating to student debt in times of national emergencies, did not permit the Biden administration’s student-debt-relief plan.

The Biden administration sought to implement its debt-forgiveness program to provide relief for loan borrowers in light of the COVID-19 pandemic. The Supreme Court’s decision striking down the plan arose from suits brought by six states with Republican attorney generals. A federal district court dismissed the case, holding that the states lacked standing to sue. The states appealed, and the Eighth Circuit issued a nationwide preliminary injunction pending resolution of the appeal. The secretary of education asked the Supreme Court to either vacate the injunction or grant certiorari. The Supreme Court granted the secretary’s petition for certiorari on the questions of standing and the legality of the proposed plan.

The AAUP joined the AFT and AFSCME in filing an amicus brief that supported the administration’s plan. In joining the brief, the AAUP committed to its mission of advancing the economic security of faculty and other academic workers and ensuring higher education’s contribution to the common good. The brief emphasized the burden that the pandemic placed on American workers, educators, healthcare workers, and students alike. The brief stated that amici “have a strong interest in ensuring that workers with student loan debt are not left in a worse position as to their student loans by the COVID-19 pandemic.” The brief argued that the proposed plan was a lawful exercise of the HEROES Act, highlighting that the HEROES Act plainly allows for recipients of loans to obtain relief to mitigate the financial implications of a national emergency. Amici argued that the HEROES Act is the proper vehicle to provide this relief and to target the range of “ill effects that will last far beyond the pandemic.” The brief also pushed back against the proposed alternatives to the plan such as temporary deferment or continued pause on interest rates, arguing that a permanent, realistic solution was the only feasible approach that could meaningfully subdue the long-term economic impacts of the pandemic.

The court first answered the question of whether the six states had standing to sue. The question focused on Missouri’s Higher Education Loan Authority (MOHELA) and whether Missouri could bring suit on behalf of their program, arguing that the proposed debt-forgiveness would cost MOHELA upwards of $44 million and would impact the state’s ability to support the state’s higher education programs. The court held that MOHELA had standing to sue because the anticipated financial impact created an “injury in fact”; therefore, Missouri and the other five states who sued the Biden administration also had standing to sue the proposed debt-relief program.

The court then turned to whether the Biden administration’s proposed plan complied with federal law. Chief Justice John Roberts, writing for the court’s Republican-appointed majority, held that the Biden administration exceeded the HEROES Act’s statutory authority, opining that the administration did not seek to “waive or modify” but rather to “transform” entirely the nature of student loans. According to the majority, the HEROES Act does not allow “canceling $430 billion of student loan principal” or creating what Roberts characterized as a “novel and fundamentally different loan forgiveness program” than what was imagined when the HEROES Act was passed into law. Roberts invoked the “major questions doctrine,” a legal argument that the Roberts court has used to invalidate executive and agency actions when the court believes that issues of great political or economic magnitude are at stake. The court held that Congress made no decision to implement a large-scale debt-relief program and made no explicit delegation of power to the administration.

Justice Kagan dissented. She criticized the court’s standing analysis and further wrote that the HEROES Act provided the secretary of education with broad authority to implement the student-loan-relief plan, which the majority was only able to overturn by “picking the statute apart” to reach their conclusion, effectively leaving the act “with no ability to respond to large-scale emergencies in commensurate ways.”

President Biden issued a statement expressing his disagreement with the court’s decision. He stated that his administration plans to work around this decision and to announce next steps.