Petitions seek to invalidate Biden administration’s plan, leaving borrowers wondering what will happen
The embattled Student Loan Forgiveness Program championed by President Biden’s administration has continued to make headlines in the last week. The economic concerns over the program have been overshadowed by the Supreme Court, which heard oral arguments in two cases seeking to stop the rollout.
According to the official White House website, 26 million Americans have received eligible status so far. By the White House’s official tally, in Oregon alone, the program saw 329,000 applied or auto-eligible borrowers, 211,000 of whom received full approval and were sent to debt-collecting institutions for forgiveness. These borrowers may receive up to $10,000 in general loan forgiveness or up to $20,000 for Federal Pell Grant recipients who are predominantly lower-income borrowers.
The program was only open for four weeks before two separate lawsuits were filed to stop it. One, Biden v. Nebraska, combines the legal resources of Republican-controlled Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. The other, Department of Education v. Boren, is backed by the Job Creators Network Association, a conservative advocacy group.
Todd Lochner, Dr. Robert B. Pamplin Jr. Associate professor of government at Lewis & Clark, weighed in on the buzz around the upcoming decision, which will be announced by July 1.
“It’s an important area of constitutional law. It’s just not one that I can teach my classes,” Lochner said. “It really deals with separation of powers and the extent to which executive agencies such as the Department of Education can interpret seemingly broad or ambiguous statutes in ways that perhaps Congress itself did not intend.”
The power of the executive branch, in this case exercised by President Biden through the Department of Education, is a particularly concerning area to the Court and one that often sees programs being struck down as overreaching.
However, if the program is to survive, the best hope is for the Court to find an issue with the petitioner’s ability to bring the case in front of the Court due to personal harm or standing.
“If this policy survives, it’s because the litigants didn’t have standing and the case is dismissed,” Lochner said. “If the court decides that the litigants do have standing, I think likely the Biden administration loses. And that’s just because many of the conservative justices on the court take a very dim view of assertive presidential action and what they will consider to be executive overreach.”
As one case is specifically led by states, the litigants must be able to prove the state will be harmed by the program. Missouri’s participation is hinged on the Missouri Higher Education Loan Authority (MOHELA), whose revenue would be hurt by the forgiveness program. However, as MOHELA specifically declined to sue directly, the state’s ability to sue on their behalf has been questioned.
This is not the first time such an issue has been brought up — far from it. Although last time, the political leanings of the presidential administration were reversed, in Trump v. Hawaii.
“I would say it’s somewhat ironic that we had a case that dealt with a similar conceptual topic under Donald Trump when he was president, and he tried to basically dramatically modify the immigration law, (specifically) the Dreamer Act,” Lochner said. “All the liberal justices said he couldn’t do that. Most of the conservative justices said he could, except for Chief Justice Roberts, with the swing vote in that case where he said no, that’s
executive overreach. You’re not allowed to do that. So to be perfectly honest, this talk demonstrates how both sides of the Court are political. I fully expect the same justices who said Trump couldn’t do that are now gonna say Biden can.”
The Supreme Court is ostensibly a non-political body, but recent rulings have done little to support such a notion. Instead, scholars like Lochner have observed that political beliefs can sway two legally similar decisions in two politically different directions. In Trump v. Hawaii, the conservative majority on the Court upheld the very interpretation of executive power most scholars say they will not allow Biden.
According to congress.gov, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act grants emergency economic powers and funds to the federal government while the COVID-19 pandemic is still designated a national emergency. As the state of emergency is gradually being lessened, this authority is being slowly chipped away at.
Regardless of the specifics of this case, decisions by the Court are not just important for specific cases, they also set precedent, which is a principle or rule from prior legal cases that influence future decisions. The Court is specifically deferential to precedent, and so Justices long gone often have echoes in modern Court cases.
“When most people think about cases, they just care about the outcome,” Lochner said. “So if I’m a student, and I’ve got student loan debt, I just want this law to survive because I want $10,000 or $20,000, wiped right, then I’m happy. And that’s a perfectly reasonable way to think about the policy effects of the law. But I would encourage people to think very, very carefully about the precedent that a Biden victory would set.”
No matter what precedent is established at the end of these two cases, both sides incur wins and losses. Should the program survive, the broad interpretation of executive power could clear the way for future conservative administrations to create programs less amenable to the very demographics who would support loan forgiveness. Should it fail, the Court could reasonably be interpreted as moving further down the path of judicial politics, and borrowers around the country will be expected
to start repaying their loans in a rocky economy.
“Giving the Biden administration more authority to act in the face of a potentially ambiguous statute is going to create precedent that will allow future presidents to do exactly the same thing,” Lochner said. “Precedent sticks around. And people need to be aware of that as they’re thinking about how they want this case to come out.”
The Court is expected to make a decision in June 2023.