Student Loan Forgiveness at Risk after Skeptical Justices Focus on Fairness and Authority

Earlier this week, the United States Supreme Court heard oral arguments in a challenge to the Biden administration’s effort to cancel $400 billion in student debt. The litigation was initiated by a group of six right-leaning governors and two individuals who did not qualify for the program. They maintain the administration lacks the authority to enact such a sweeping measure absent congressional authority. According to the White House, the plan amounts to the administration of a benefit – rather than new legislation – which is permissible under the 2003 Higher Education Relief Opportunities for Students Act (the “HEROES Act”). The HEROES Act permits the education secretary to “waive of modify” student loan programs during national emergencies to prevent borrower distress.

The Court’s conservative majority appears to be highly skeptical of the government’s authority to cancel such a staggering amount of debt. Chief Justice Roberts and other conservative justices raised the “major questions doctrine,” which requires congressional authorization of government actions with major consequences. They also noted that the words “waive or modify” do not mean “cancel.” The justices also appear concerned that the loan forgiveness is unfair to Americans who will not benefit. For example, Justice Roberts posed a hypothetical about two high school graduates: one takes out a loan for college which is forgiven by the government; the other receives a bank loan to start a lawn-care service, and then sees his tax dollars used to support the forgiveness of student loan debt. In response, US Solicitor General Elizabeth Prelogar stated, “My answer to that question is that Congress has already made the judgment that when there is a national emergency that affects borrowers in this way, the secretary can provide relief.”

Though it is difficult to predict when the Court will rule, it is likely the justices will release a decision sometime in June, before the end of the term. After oral argument, President Biden publicly conceded the plan was at risk. In a statement to reporters outside the White House, he said: “I’m confident we’re on the right side of the law. I’m not confident about the outcome of the decision yet.”