Rule of Law

Supreme Court’s 2 cases on Biden student loan forgiveness plan will begin in February

Oral arguments for Department of Education v. Brown and Biden v. Nebraska will begin in the U.S. Supreme Court on Feb. 28 to determine the future of President Joe Biden’s student loan forgiveness plan.

In the Supreme Court’s upcoming evaluation of the constitutionality of President Biden’s loan forgiveness plan, the two cases call into question specifically the legal authority of the U.S. Department of Education, as well as whether states suing have the right to challenge the relief plan.

In August 2022, Biden announced a three-part student loan forgiveness plan which would provide $20,000 in debt cancellation to Pell Grant recipients and $10,000 to non-Pell Grant recipients. The plan outlined that borrowers would be eligible for relief if their income is less than $125,000 for individuals and less than $250,000 for married couples.

The plan saw immediate legal pushback in September and October, with two lawsuits making their way to the Supreme Court shortly after the Biden administration initially announced the student loan forgiveness plan.

The two lawsuits, filed in September and October, immediately followed Biden’s announcement of the plan. The Department of Education v. Brown invoked the Higher Education Relief Opportunities for Students Act of 2003, or HEROES Act, which addressed the Secretary of Education’s powers in the wake of a national emergency.

The lawsuit alleges the plaintiffs were ineligible for financial assistance under the plan because they were “improperly denied the opportunity to comment on the plan.”

On Wednesday, the judicial think tank Constitutional Accountability Center filed an amicus curiae, or a judicial brief from an outside group that has an interest in the case, arguing that long-standing economic difficulties for individuals with low or middle incomes were “amplified” as a result of the national emergency of the COVID-19 pandemic.

CAC’s brief adds that the HEROES Act gives the Secretary of Education broad authority to respond to national emergencies to ensure federal student-aid recipients “are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals.”

The HEROES Act authorizes the Secretary of Education to “waive or modify any requirement or regulation applicable to the student financial assistance programs… as deemed necessary,” according to the act. A change can only occur if certain criteria are met, such as if an individual “resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency.”

On March 13, 2020, then-President Donald Trump declared a national emergency during the beginning of the COVID-19 pandemic in the U.S. In February 2022, Biden extended the national emergency declaration until February 2023. The COVID-19 national emergency status allowed the Department of Education to “invoke” the pandemic to justify Biden’s loan forgiveness plan, according to a brief submitted by the states.

With Biden’s student loan forgiveness plan still in legal limbo, the Department of Education announced new regulations in a Jan. 10 press release that would make the student loan repayment process for low-income individuals simpler and more affordable by slashing monthly payments based on income.

In Biden v. Nebraska, six states filed a lawsuit claiming that the loan forgiveness program violates the U.S. Constitution’s principle of separation of powers and the Administrative Procedure Act. A district judge in Missouri dismissed the lawsuit on the basis that the states failed to demonstrate they had caused direct and traceable harm by the policy.

Following the Missouri judge’s ruling to dismiss six states’ claims that the plan violates the principle of separation of powers in Biden v. Nebraska, three judges from the 8th U.S. Circuit Court of Appeals unanimously blocked the Biden administration from canceling student debt in November 2022.

For both Department of Education v. Brown and Biden v. Nebraska, the Supreme Court justices rejected the Biden administration’s requests to reinstate the program while the cases were still pending. But, the judges did agree to take up the cases to prevent further delays in the appeals courts.

In December 2022, The U.S. Department of Education filed a writ of certiorari, or a court process to review a lower-court or government agency decision, which received responses from both parties and was accepted on Dec. 12. In accepting the request, the Court agreed to hear the case in February.

Cardona in November called the lawsuits “baseless,” adding that the Biden-Haris administration is “as committed as ever” to delivering student debt relief for Americans.

“Callous efforts to block student debt relief in the courts have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong,” Cardona said.