by Elise Spenner
On Thursday, Justice Amy Coney Barrett acted alone in denying a Wisconsin challenge to President Joe Biden’s student debt relief plan. She did not refer the case to the full court.
However, just a day later, the Eighth Circuit temporarily stayed the student debt plan while hearing an entirely different lawsuit brought by six Republican states. That means the Biden Administration may not relieve any student debt until the circuit court finalizes their ruling.
Below, I’ll break down the student debt proposal and the progress of the two prominent legal objections to it.
The “One-Time Student Loan Debt Relief” Plan:
In late August, President Biden announced the “One-Time Student Loan Debt Relief” plan, canceling $10,000 in federal student loan debt for those who make less than $125,000 a year and $20,00 in debt for Pell grant recipients. Thus far, more than 22 million borrowers have submitted applications for debt relief. The program is intended to last more than 30 years, and will cost $379 billion over that time, the Education Department has estimated.
To implement the program, Biden leveraged the HEROES Act, a 2003 federal law enacted after the 9/11 attacks, that says the Secretary of Education may “waive or modify” student financial assistance programs during a war, military operation, or national emergency. The COVID-19 pandemic, his administration said, qualifies as a national emergency. Notably, President Donald Trump’s administration also relied on the HEROES Act to pause repayments for federally-held student loans through the end of 2022.
Brown County Taxpayers Association v. Wisconsin:
At the district court level, a judge found that the applicants — Brown County Taxpayers Association, a conservative group that represents business owners and taxpayers — lacked standing. The judge reasoned that they hadn’t faced personal injury as a result of Biden’s plan.
Although the applicants acknowledged that standing was likely their largest barrier to relief in appealing to the Supreme Court, they argued that any and every taxpayer is impacted when the President asks them “to assume perhaps over one trillion dollars in debt.”
Interestingly, in their application to the Supreme Court, Brown County relied heavily on the “major questions” doctrine embraced by the Court in West Virginia v. EPA. This theory argues that Congress must “speak clearly” if it delegates authority to an agency to make decisions of “vast economic and political significance.” If Congress’ statutes are vague or ambiguous in language, the Executive Branch — through agencies — can’t claim the power to make radical changes. According to Brown County, the Secretary of Education overstepped its constitutional authority in changing student debt policy — a “major question.”
Brown County brought the case to the Supreme Court through an emergency appeal on the “shadow docket.” It reached Justice Amy Coney Barrett’s desk because she has jurisdiction over requests from the Seventh Circuit — Illinois, Indiana, and Wisconsin. However, when a Justice receives a concerning or contentious case from the “shadow docket,” they typically refer it to the full Court for consideration. It’s notable, then, that Barrett didn’t think this case deserved the attention of all nine justices; she felt comfortable rejecting it on her own.
State of Nebraska v. Biden:
Across the country, six attorney generals in conservative states have challenged the plan on the grounds that their state-based loan companies would lose profit if student debt was canceled. Once again, their standing claims rest on shaky ground.
Initially, the case was brought before Judge Henry Autrey of the Eastern District Court of Missouri, appointed by President George W. Bush. He ruled that none of the states met standing requirements, and thus their cases could not move forward.
Arkansas and Nebraska both claimed that the consolidation of a certain type of family education loans into Direct Loans would impact their ability to finance further loans. But at the end of September, the federal government said that consolidated loans would not be included in debt relief. Thus, those claims were no longer relevant, and any other possible injury was speculative.
In Missouri, Judge Autrey said that MOHELA — a non-profit entity that services federally-held student loans — could suffer damage from loan relief in the form of “loss of revenue, limited access to debt markets and lesser borrowing capacity.” However, Judge Autrey clarified that MOHELA was, by law, financially separated from Missouri and the state had no obligation to pay for MOHELA’s debts. Missouri has never before sued on behalf of MOHELA or stepped in to shield MOHELA from legal obligations, and it couldn’t start doing so now.
The Eight Circuit didn’t say they disagreed with Judge Autrey. They merely put a stop to Biden’s debt relief plan until they make their final ruling — either dismissing the suit or permanently enjoining the debt plan. The Eight Circuit has expedited the case, meaning that official ruling will likely come sooner rather than later.
Conclusion:
The important thing to note from these suits is that standing is the central issue. The merits of the claims have not yet been considered because it seems like most of the plaintiffs are stretching implausibly for sources of injury that could make them eligible for relief. Thus, issues related to the “major questions” doctrine and the authority of the executive branch won’t even be considered if the parties don’t clear the hurdles posed by standing requirements.
Eventually, however, you should expect that the full Supreme Court will hear a case about Biden’s student loan plan in one form or another given the avalanche of lawsuits currently stewing in lower courts.
High School SCOTUS 