Rule of Law

Biden v. Nebraska & Department of Education v. Brown

In two cases, the Supreme Court is considering whether to allow the Biden Administration’s student debt relief plan to go into effect.

Case Summary

In August of 2022, President Joe Biden announced his Administration’s student debt relief plan, which would forgive up to $10,000 in federal student loan debt for borrowers earning less than $125,000 per year. Legal challenges to the program quickly emerged, including one in Missouri from a group of six states and another in Texas from two individuals with student-loan debt.  On October 21, 2022, the United States District Court for the Eastern District of Missouri dismissed the states’ complaint for lack of jurisdiction, concluding that the plaintiff states failed to establish standing to sue. The states then appealed to the Eighth Circuit Court of Appeals, which granted an emergency motion for an injunction. On November 10, 2022, the United States District Court for the Northern District of Texas granted summary judgment in favor of the individual challengers. The court concluded that the HEROES Act did not authorize the plan and vacated it nationwide. The government appealed to the Fifth Circuit Court of Appeals, which declined to stay the case.

In November 2022, the federal government asked the Supreme Court to vacate the injunctions against the plan, and CAC filed an amicus curiae brief in support of the federal government’s request on behalf of former Representative George Miller, who co-sponsored the HEROES Act and served as a member and chairman of the House Education and Labor Committee for many years. The Supreme Court declined to vacate the injunctions, but agreed to evaluate the merits of the claims against the plan.

On January 11, 2023, CAC filed an amicus curiae brief in support of the student debt relief plan on behalf of former Representative Miller. The brief makes two main points.

First, the text of the HEROES Act makes clear that the Secretary of Education has broad authority to respond to national emergencies. The Act explicitly states that the Secretary may “waive or modify any statutory or regulatory provision” regarding federal student loan programs to ensure that federal student-aid recipients who are affected by national emergencies “are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals.” The student debt relief plan is authorized by this broad language because the regulations requiring student borrowers to pay the full balance of their educational debts are provisions that can be waived or modified under the HEROES Act, and the COVID-19 pandemic, which has been a presidentially-declared emergency since March 2020, is a national emergency that permits the Secretary to use this waiver or modification authority.

Second, the history of the HEROES Act confirms that it authorizes action as broad as its text indicates. As Representative Miller knows well, Congress was focused on flexibility when it passed the HEROES Act of 2003 and reauthorized the law in 2005 and 2007. At each of these junctures, Congress planned to give the Secretary of Education broad discretion and “flexibility” to protect student loan recipients from military emergencies, national disasters, and any “unforeseen issues that may arise.” Lawmakers also explained that the law enabled the Secretary to “relax payment obligations” and “reduce or delay monthly student loan payments.”

Significantly, Secretaries of Education in both the Trump Administration and the Biden Administration have used their HEROES Act authority to issue broad waivers and modifications in response to the COVID-19 pandemic. For example, after President Trump declared a national emergency in March 2020, Secretary Betsy DeVos used her HEROES Act authority to set the interest rates of federal student loans to zero, allowing all borrowers to suspend payments without penalty. This payment pause swept even more broadly than the debt relief plan because it applied to all student borrowers regardless of income, and Congress ratified and extended it.

In sum, the HEROES Act provides the Secretary of Education with broad authority to adjust federal student loan programs in response to unforeseen circumstances, and the Biden Administration’s debt relief plan falls under that authority.

Case Timeline

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