The Supreme Court on Tuesday takes on the complex puzzle over President Biden’s plan to forgive more than $400 billion of college loan debt owed by students and graduates. Two cases raise core constitutional questions about presidential power and the authority of the courts against a background of intense political and cultural controversy.
The Court will broadcast “live” the audio (no video) of the hearings on its homepage, supremecourt.gov To listen, click on “Live Audio” and follow the prompt when the courtroom scene appears lower on the page. The audio also will be available, under the title of each case, on C-Span TV at this link: cspan.org/supremecourt The hearings are scheduled for one hour each.
One of the two cases tomorrow arises out the intensifying efforts of governments in politically conservative states to thwart Biden Administration policy by pursuing sweeping challenges in the federal courts. The other is a politically sensitive case about whether the Biden plan discriminates against middle-class individuals by favoring poorer people, especially minorities; that case involves two Texas borrowers.
Background on both cases: Americans place a high cultural – and economic – value on having a college education. But with college tuition almost constantly rising, the opportunity may be beyond the reach of many American families. Congress has been working for about a half-century to provide some relief.
Lately, though, the issue has been drawn into the intense political controversy over the “wealth gap,” especially as that gap exists between the races. And that controversy increasingly divides the two major political parties. Since 2019, Democrats in Congress have been pressing energetically for student loan relief, especially for poorer families (none of those bills has passed), and the issue was a prominent one among Democratic presidential candidates in 2020.
The most generous form of student financial aid is the so-called “Pell Grant” program, named for a Democratic Senator from Rhode Island. It makes direct financial grants to students in needy families, and the funding does not have to be repaid. It has existed since 1973, and such grants went this year to 5.4 million students attending about 5,400 colleges; that means about 30 percent of all undergraduate students in the nation. The maximum annual grant this year is $6,895. Total grants in this academic year are $27.4 billion.
Students who receive Pell Grants, of course, may run up college loan debt because tuition and costs run higher than the amounts of their grants. They, too, benefit significantly from President Biden’s loan forgiveness program now before the Supreme Court.
The Biden plan: The federal government is a huge lender to college students or their families. Right now, the federal government is holding student loan debt totaling about $1.6 trillion, owed by about 43 million borrowers. About 40 million of them are eligible for loan forgiveness under the Biden plan; they are the ones the government figures are more likely to be at risk of defaulting on their repayments. Defaulting can be a serious problem, because it can lead to seizure of a part of salary or wages, a major impact on the ability to borrow further, and potential loss of other federal government benefits.
The two cases before the Supreme Court are the lingering outcome of the national emergency caused by the covid-19 pandemic. The federal government is using powers that Congress originally gave it in early 2002, in the wake of another national emergency — the 9/11 terrorist attacks. It is known as the HEROES Act (short for Higher Education Relief Opportunities for Students Act) – originally passed as a temporary measure, but since made permanent.
The Act gives federal education officials the authority during an emergency to suspend the collection of student loan debt. Citing the covid crisis, both the Trump and Biden Administrations temporarily paused the collection of student loan debt held by the federal government.
Last summer, the Biden Administration moved to resume collections, but education officials decided that the impact of the re-start would pose a severe hardship for lower-income borrowers. So, the Department of Education decided to forgive $10,000 of debt for those with income of less than $125,000 a year. Students who had received Pell Grants can receive $20,000 of debt relief.
NOTE: Tuesday’s hearings will begin sometime after 10 a.m. The Court will be on the bench at 10 but plans to announce decisions in one or more pending cases. Those announcements will not be on the audio broadcast. Listeners should log on shortly after 10 to catch the hearings.
Facts of Tuesday’s first case, Biden v. Nebraska (and 5 other states):
Six states sued the President and federal officials in a federal court in St. Louis, challenging the President’s authority to adopt the forgiveness plan on the theory that the HEROES Act did not give the government power to forgive student debt, and that the Education Department had not followed required procedures in developing that plan.
A federal trial judge dismissed the case, concluding that none of the states had a legal right to file their case since they could not show that their state governments had been harmed in any way by the Biden plan. (Under the Constitution’s Article III, the federal courts have no authority to decide any case unless there was proof that the challenged activity caused legal harm and that the harm would be remedied if the lawsuit were to succeed.)
A federal appeals court, however, ruled that at least one state – Missouri – would be harmed by the Biden plan, and that was enough to keep the six states’ lawsuit moving forward. That court went on to block the plan nationwide, pending a final ruling on the plan’s legality. Its only explanation for the sweeping order was that there were “substantial questions at law” surrounding the plan.
The Biden Administration asked the Supreme Court to let the plan go forward, and suggested that the Court might want to take on the case itself without waiting for further rulings in the appeals court. The appeal argued that the appeals court was wrong on both points – the right to sue and the program’s legality – and that the interruption of the plan “leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations.”
The Court did not disturb the order keeping the plan on hold, saying it would consider that when it held its hearing on the case.
Facts of Tuesday’s second case, U.S. Department of Education v. Brown (This hearing will begin after the conclusion of the first.):
This case involves two Texans who have college loan debts and sued the Education Department because they could not take advantage of the Biden plan at all, or because they did not qualify for the amount available to others.
One of the two, Myra Brown, is a graduate of the University of Texas at El Paso and of the business school at Southern Methodist University. She received student loans from a private lender and currently owes more than $17,000. She is not eligible under the Biden plan because that plan only applies to debt held by the federal government.
The other Texan, Alexander Taylor, is a graduate of the University of Dallas. He obtained direct loans from the federal program to help pay for his education, and now owes about $35,000 on the loans. He could receive $10,000 in relief, but does not qualify for the additional $10,000 that is available to borrowers who had received Pell Grants; his family income is higher than allowed for him to qualify for a Pell Grant.
They jointly filed a lawsuit in federal court in Fort Worth, Texas, contending that the Biden plan went beyond government powers under the HEROES Act and that it was adopted illegally because the public was not invited to comment on the plan before its adoption. The trial judge rejected the second claim, finding that the government had not needed to seek public comment because it was acting in an emergency. The judge, however, ruled that the plan itself was invalid. (The judge ruled that the two borrowers did have a right to sue, because their procedural rights had been violated by the way the plan was put together and because they were denied an opportunity to get the full benefit of the forgiveness.)
Applying an approach that the Supreme Court has recently begun applying when federal agencies adopt broad and significant programs with wide political and economic impact (the so-called “major questions doctrine,” which requires an agency to have explicit authority from Congress for such a program), the Texas judge declared that the HEROES Act as written by Congress did not allow loan forgiveness, even in an emergency situation.
So, finding the Biden plan illegal, he nullified the program rather than simply blocking its enforcement while the case moved through the courts. A federal appeals court refused, without explanation, to block the judge’s ruling pending an appeal.
The Biden Administration took the case on to the Supreme Court. Noting that the Court had already agreed to hear the six-state case from Missouri, government lawyers urged the Justices to take on this case, too, without waiting for further action in lower courts. The Court agreed to do so, and scheduled hearings for the two cases to occur on the same day.
The questions before the Court – the same in both cases: first, did the states or the individual borrowers who filed these challenges to the Biden plan have a legal right to sue, and, second, if they did, had Congress in the HEROES Act given the government authority to forgive student loan debt and was the Biden plan adopted by a valid procedure?
Significance: It is obvious that the sweep of the Biden plan – involving 43 million people and the forgiveness of some $400 billion in college loan debt – makes these cases historic in scope and in political, social and economic impact.
But the case also is profoundly important because it draws the Justices into explaining or further clarifying the role of the courts and the effect on constitutional government of the intersection of politics and law at three levels:
First, the increasing use of federal court lawsuits as the arena to pursue the deeply polarizing issues over the power of the Presidency, the authority of federal government agencies, and the power of Congress to define – and keep in check – the powers of the Executive Branch. This is becoming an increasingly serious issue of separation of powers, potentially blurring constitutional allocations of great power. The Court may need to say more about when it will invoke the restraining influence of the “major questions doctrine.”
Second, the increasing tendency of state attorneys general, in “red states” or “blue states,” to band together to wage what are at least partly political feuds with the federal government, and what that means for potentially drawing the courts into more politicizing and often partisan controversies.
Third, the rapid spread of the phenomenon of federal trial judges issuing nationwide orders to control how federal agencies operate, rather than orders that apply only within the geographical limits of a judge’s jurisdiction or limited to those entities that actually had sued.
And, beyond those, these two cases are unfolding amidst the sometimes angry nationwide conversation about how America will deal with the “wealth gap,” especially as it exists between the races.
On Wednesday, the Supreme Court completes this week’s hearings, with a single case that will take the Justices back to constitutional origins, to decide when a state can pull out of a binding arrangement to settle common issues with another state.
