On February 28, 2023, the Supreme Court heard oral argument in two separate cases challenging the Biden Administration’s authority to proceed with its plan to forgive approximately $400 billion in federal student loans. In the first case, the Biden Administration seeks to vacate an injunction granted by a three-judge panel of the U.S. Court of Appeals for the Eighth Circuit in connection with an appeal filed by state attorneys general of six states (Missouri, Arkansas, Nebraska, Iowa, Kansas, and South Carolina), whose challenge to the loan forgiveness plan had been dismissed in October 2022 by a federal district court for lack of Article III standing. In the second case, the Court is hearing the Biden Administration’s appeal of a Texas federal district court’s ruling that the Secretary of Education had announced the loan forgiveness program without engaging in a mandatory notice-and-comment period, and that the Biden Administration had not made a heightened showing of “clear congressional authorization” for the program in light of its political and economic significance.
At argument on the two cases, which lasted nearly four hours, at least four members of the Court’s six-member conservative majority—Chief Justice Roberts, along with Justices Thomas, Alito, and Gorsuch—repeatedly expressed skepticism over the Administration’s authority to proceed with its forgiveness plan under the HEROES Act, which permits the Secretary to engage in waivers and modifications of federal student lending provisions under certain circumstances relating to a national emergency. As expected by many commentators, Chief Justice Roberts framed the issue as ripe for analysis under the “major questions” doctrine, under which the Court requires heightened specificity from Congress when assessing an executive agency’s claim that Congress has delegated the agency with authority over issues of great socioeconomic or political significance.
Members of the conservative majority opined that the plain text of the HEROES Act—which does not mention loan “forgiveness” or “cancellation”—lacked such specificity. Justice Gorsuch further queried whether the broad-spectrum loan forgiveness plan at issue might be overbroad even if loan forgiveness for a smaller set of disaster-impacted borrowers were permissible. The Court’s three-member liberal wing, led in seniority by Justice Sonia Sotomayor, voiced the contrary view that the plain text of the HEROES Act clearly authorized the Administration’s proposed action and that the Secretary of Education’s plan was not arbitrary and capricious in light of the pandemic’s impact on student borrowers. The views of Justices Brett Kavanagh and Amy Coney Barrett were less clear based on their questioning.
The Court also grappled at length with each set of plaintiffs’ claims as to standing. In the state attorney-general matter, several conservative justices asked questions indicating a view that the State of Missouri, in particular, had standing to seek redress for injury-in-fact that the program’s implementation would cause to its in-state loan servicer, the Missouri Higher Education Loan Authority (MOHELA). The Solicitor General, appearing on behalf of the Biden Administration, conceded that MOHELA itself would have had standing to bring suit, but argued that the Missouri Attorney General lacked the ability to bring a standalone challenge to the Administration’s plan where MOHELA was not a party. The Court’s three liberal members uniformly appeared to support the Solicitor General’s view. Both sides emphasized certain respects in which MOHELA’s finances were or were not intertwined with those of the State itself as a relevant factor in assessing the State’s theory of vicarious standing, which could set the stage for a new, fact-driven standard for when states have standing to challenge federal programs that would impact their quasi-independent agencies.
Last, despite extensive questioning by the Court’s liberal members with respect to the standing of the individual plaintiffs in the second matter, the Court’s conservative majority was far less vocal in pushing back in support of such standing. Because the Biden Administration has conceded that only a single plaintiff needs to have standing for the Court to address the merits of the case, the Court may conclude that resolution of the individual plaintiffs’ standing is unnecessary to its eventual opinion.
Although tradition and workflow often dictate that the Court’s most significant and contentious decisions are issued toward the end of its term in June, the possibility exists that the Court could rule sooner, particularly in light of the potential impact of its decision on the resumption of federal student loan payments, which have been paused since early 2020.
Transcripts of the oral arguments are available here and here.
[View source.]
