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Conservative and liberals split at Supreme Court over Biden student loan plan

Student loan borrowers and advocates gather Tuesday for a rally during the Supreme Court's arguments on President Biden's student debt relief plan.
Jemal Countess
Getty Images for People's Rally
Student loan borrowers and advocates gather Tuesday for a rally during the Supreme Court's arguments on President Biden's student debt relief plan.

A handful of Republican-dominated states seemed on the verge of invalidating President Biden's student loan forgiveness plan at the Supreme Court on Tuesday, with a majority of the court's conservatives indicating great skepticism.

In 2003, after the 9/11 attacks, Congress passed a law to ensure that federal student loan borrowers would not be economically hammered in a national emergency. Specifically, the law says that when the president declares such an emergency, the secretary of education has the power to "waive or modify any statutory or regulatory provision" governing student loan programs.

Both the Trump and Biden administrations invoked the law to pause student debt payments without penalties during the pandemic. Then last year, President Biden, pressed by some progressives in his own party, went further with a plan to provide up to $20,000 in debt relief for borrowers with limited earnings.

Estimates of the plan's cost have ranged from $300 billion to $430 billion, but on Tuesday at the Supreme Court, Chief Justice John Roberts went high. We're talking about "half a trillion" dollars in debt, and 43 million borrowers, he said. If you're going to "give up" that much money and "affect the obligations of that many Americans on a subject that's of great controversy, they would think that's something for Congress to act on," he added.

Solicitor General Elizabeth Prelogar, representing the Biden administration, replied that Congress had acted when it passed the 2003 law creating special provisions for student loan forgiveness during a declared national emergency.

Justice Brett Kavanaugh observed that when it comes to emergency powers, "some of the biggest mistakes in the court's history were deferring to assertions of executive or emergency power," and, "some of the finest moments in the court's history were pushing back against presidential assertions of emergency power."

Prelogar replied that in this case, the secretary of education made the necessary findings to justify the loan forgiveness. Without relief for debtors, there will be a "wave of default across the country with all of the negative consequences that has for borrowers," she said. Indeed, she argued, the Biden plan "is precisely the type of context where the executive should be able to implement those emergency powers."

Justice Sonia Sotomayor also focused on the borrowers. "They don't have friends or families or others who can help them make these payments," she said, adding that many of them will have to default, worsening their financial situation. "Once you default, the hardship on you is exponentially greater. You can't get credit, you're going to pay higher prices for things. They are going to continue to suffer from this pandemic in a way that the general population doesn't."

Conservative Justices Clarence Thomas, Neil Gorsuch and Amy Coney Barrett countered that a provision that gives the education secretary the power to waive and modify the terms of federal student loans is not the same thing as erasing all or part of those loans, wiping the debt off the books.

The court's three liberals had a very different view. Justice Elena Kagan pointed to the expansive words of the statute.

"We deal with congressional statutes every day that are really confusing," Kagan said. "This one is not."

The biggest sticking point of the day, though, was whether the six state objectors have legal standing to challenge the student loan forgiveness plan at all. If they can't show they have suffered a concrete harm, they have no right to sue.

On Tuesday, the states hung their argument on a claim that the Biden plan, by discharging millions of loans, could end up depriving the state of Missouri of revenue from the Missouri Higher Education Loan Authority, known as MOHELA.

MOHELA is an independent corporation set up by the state that services student debt, but it explicitly did not join this lawsuit — a fact that both liberal and conservative justices pounced on.

"It's been set up as an independent corporate entity with the ability to bring suits on its own," Justice Kagan said. "Usually we don't allow one person to step into another's shoes and say, 'I think that person has suffered a harm,' even if the harm is very great."

Justice Ketanji Brown Jackson added that the court should "be concerned about jumping into the political fray unless we are prompted to do so by a lawsuit that is brought by someone who has an actual interest."

Conservative Justice Barrett was even more pointed. "If MOHELA is an arm of the state, why didn't you just strong arm MOHELA and say you've got to pursue the suit?"

Nebraska Solicitor General James Campbell, representing all six GOP states, replied that it was "a question of state politics" but argued that as a matter of law, "the state has the authority to assert its interest."

At the end of a 3 1/2-hour argument, the bottom line remained the same. Unless the court decides that the states have no standing to sue and throws the case out of court, the Biden student loan forgiveness program will likely be struck down.

A decision in the case is expected by summer.

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Nina Totenberg is NPR's award-winning legal affairs correspondent. Her reports air regularly on NPR's critically acclaimed newsmagazines All Things Considered, Morning Edition, and Weekend Edition.
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