1. At least Missouri has standing to challenge the Secretary’s program. 2. The HEROES Act allows the Secretary to "waive or modify" existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, but does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal.
Biden v. Nebraska, 600U.S.477 (2023), was a United States Supreme Court case related to the forgiveness of federal student loans by the Biden administration in 2022, challenged by multiple states. The Supreme Court's ruling was issued on June 30, 2023, ruling 6–3 that the Secretary of Education did not have the power to waive student loans under the HEROES Act.
Biden was heard and decided alongside Department of Education v. Brown, 600U.S.551 (2023), in which members within the student loan program had brought suit against the debt forgiveness program. This case was vacated on the basis of lack of standing by the student loan members.
While campaigning for president in 2020, Joe Biden promised to cancel up to $10,000 of federal student loan debt per borrower.[1] After being elected president, Biden called for the 117th U.S. Congress to pass a bill to facilitate $10,000 in student loan forgiveness.[2][3] In August 2022, Biden announced that he would use executive action to forgive $10,000 in student loans for borrowers earning less than $125,000 individually and $250,000 as married couples, including an additional $10,000 for Pell Grant recipients.[4] The Biden administration invoked the HEROES Act as the basis for his executive authority to forgive loans. In particular, the administration utilized language that states that the U.S. Secretary of Education has the authority to "waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under Title IV" of the Higher Education Act of 1965 to ensure that "affected individuals" are not placed in a worse position financially in relation to that financial assistance. Affected individuals include, among others, those who "reside or are employed in an area declared a disaster area in connection with a national emergency" and those who "suffered direct economic hardship as a result of a war, military operation, or national emergency."[5]
Separately, on October 10, 2022, two student loan borrowers who did not qualify for the proposed debt forgiveness filed a lawsuit in the Northern Texas U.S. District Court, seeking to vacate the student loan forgiveness program.[8] The borrowers asserted they had standing due to their inability to voice their disagreement with the program through a formal notice-and-comment rule making process required by the Administrative Procedure Act. On November 10, 2022, district judge Mark Pittman issued an order to strike down the student loan forgiveness program.[9] On November 30, 2022, the U.S. 5th Circuit Court of Appeals declined to issue a hold on the order in response to an appeal from the U.S. Department of Education.[10]
After the 8th Circuit granted an injunction pending appeal, the federal government sought to vacate the stay at the Supreme Court on November 18, 2022. On December 1, 2022, the court deferred resolution of the application, granted certiorari before judgment and set the case for argument in the February 2023 sitting.[11] On December 2, 2022, the Biden administration requested that the court either hear the government's appeal from Pittman's order alongside the Nebraska case or issue a hold on his order.[7] On December 12, the Supreme Court agreed to hear arguments in the second case initiated by the student loan borrowers, Department of Education v. Brown, jointly with Biden v. Nebraska.[12][13] On January 4, 2023, the Justice and Education Departments filed a brief with the Court that argued that the plaintiffs failed to demonstrate legal injury from the proposal and thereby lacked standing under Article III, and that denied the claims made by the plaintiffs that the administration was overstepping its statutory authority in promulgating the proposal under the HEROES Act.[14]
Oral arguments for both Department of Education v. Brown and Biden v. Nebraska were held on February 28, 2023.[15][16] Many journalists and legal commentators stated that, based on oral arguments, the Court seemed likely to overturn the Biden debt relief program.[17][18][19][20][21]
On June 30, 2023, the Court issued a 6–3 decision for Biden v. Nebraska, striking down the debt forgiveness program. The majority opinion was authored by Chief Justice John Roberts and joined by Justices Samuel Alito, Clarence Thomas, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett. After first establishing that at least Missouri had Article III standing to challenge the debt forgiveness program, Roberts held that the statutory grant of authority to the Secretary of Education to 'waive or modify' loan terms could not be extended to the student loan forgiveness program, and that a debt cancellation of this scale required clear congressional authorization and fell under the major questions doctrine.[22][23] The Court also issued a unanimous decision authored by Justice Alito for Department of Education v. Brown, holding that the plaintiffs did not have standing.[24][25]
President Biden responded to the Supreme Court's decision by pledging a new effort to cancel student loans by utilizing the Higher Education Act of 1965.[22] Biden was one of several Democrats that also contrasted the debt forgiveness program with the Paycheck Protection Program, which had by the date of the decision forgiven around $757 billion in loans, including to several Republican lawmakers' businesses; Biden stated "I was trying to provide students with $10,000 to $20,000 in relief. The average amount forgiven in the PPP program was $70,000. The hypocrisy is stunning."[27]
