Mar 1, 2023

Student loan cancellation and the Supreme Court.

Student loan cancellation and the Supreme Court.
Photo by Tim Gouw / Unsplash

Biden's program faces its biggest legal test yet.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 12 minutes.

Today, we're exploring the question of whether Biden's student loan cancellation program is legal. Plus, an under the radar story about SNAP benefits and a first-time-ever for our most-clicked link.

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Quick hits.

  1. The Biden administration opened up applications for chip manufacturers to apply for government funding, including requirements that firms must meet like providing child care to workers. (The requirements)
  2. The White House is giving government agencies 30 days to delete TikTok from federal devices, citing security concerns. Canada, Taiwan, and some European countries are considering similar bans. (The deadline)
  3. Eli Lily is going to reduce the price of its most commonly prescribed insulin drug by 70% and cap prices at $35 in certain pharmacies for people with private insurance. Medicare recipients are already benefiting from capped prices. (The plan)
  4. Almost 700 Iranian schoolgirls have been poisoned since November in what officials believe are targeted attacks to close down their schools. (The crime)
  5. Chicago Mayor Lori Lightfoot (D) lost her re-election bid, becoming the first incumbent mayor in Chicago to be defeated after one term in 40 years. Paul Vallas (D) and Brandon Johnson (D) will meet in a runoff. (The race)

Today's topic.

Biden's student loan forgiveness plan. On Tuesday, the Supreme Court heard oral arguments in a challenge to President Biden's student debt cancellation program. Members of the Supreme Court's conservative majority seemed skeptical of the legality of the program, casting doubt on its future.

During arguments, the Court is focusing on two questions: First, do the litigants challenging the administration's program have standing to sue. Second, whether the administration violated a separation of powers principle known as the "major questions doctrine" by acting without explicit congressional authorization to implement a program.

We previously covered the legality of Biden's student loan cancellation here.

Refresher: Both former President Trump and President Biden invoked the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which was designed to grant waivers or relief to student loan recipients in connection with a war, military operation or national emergency, to suspend student debt payments.

But Biden took it a step further, asking the Department of Education to explore whether the HEROES Act could be used to cancel student debt. The department concluded that it could, releasing a memo saying the act "grants the Secretary authority that could be used to effectuate a program of targeted loan cancellation directed at addressing the financial harms of the COVID-19 pandemic" and gives "broad authority to grant relief from student loan requirements during specific periods (a war, other military operation, or national emergency, such as the present COVID-19 pandemic) and for specific purposes (including to address the financial harms of such a war, other military operation, or emergency)."

In August, Biden exercised that authority, releasing a plan that forgives $10,000 in debt for individuals earning less than $125,000 per year and $20,000 per year for those who received Pell grants designated for low-income families. The Congressional Budget Office says the plan will cost about $400 billion over 30 years. Roughly 26 million people applied for student debt relief, and more than 16 million of those applications have been approved. But the program has been on hold since November, when a judge in Texas struck it down.

On Tuesday, the justices spent most of their time on Biden v. Nebraska, which court watchers believe has the best chance of succeeding. In that case, six Republican-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — have challenged the order’s legality. The states initially lost a challenge on standing, but a three-judge panel of the U.S. Court of Appeals blocked that ruling. In a separate case, the Department of Education v. Brown, two individual borrowers who were deemed ineligible for the program for different reasons are suing on the basis that they were unjustly deprived of access to a government program, urging the administration to expand the plan to provide greater relief. A lower court has ruled that they do have standing.

First, the Supreme Court will rule on whether either of the plaintiffs have standing, then it will make a determination about the legality of their arguments. In Biden v. Nebraska, the states argue they have standing because Missouri created and controls the Missouri Higher Education Loan Authority (MOHELA), which services student loans, and Biden's debt cancellation program threatens to cut MOHELA's revenue source by 40%. U.S. Solicitor General Elizabeth Prelogar argues that even if MOHELA were harmed, that harm wouldn’t be sufficient to justify a lawsuit because of its relationship to the state, an argument the liberal justices seem sympathetic to but the conservative justices do not.

If the Court rules that either plaintiff has standing, it would be likely to strike the program down. Over the course of this Supreme Court’s decisions so far, it has pushed for clear grants of congressional authority when it comes to major policy.

In June, the Court struck down the Environmental Protection Agency's ability to regulate carbon emissions based on the major questions doctrine. It also ruled against the Centers for Disease Control and Prevention, which it said was not authorized to impose a moratorium on evictions. Similarly, the Court ruled that the Occupational Safety and Health Administration could not force workers to get vaccinated against Covid-19 or undergo regular testing.

While the ruling would have a large impact on the Biden administration, it could also reverberate throughout the government, affecting when and how states can challenge federal policies in court.

A reminder: We are not discussing the merits of student loan cancellation, which we covered here and here, only the program’s legality, which the Court should decide by July. Today, we're going to take a look at some arguments about the standing question and the legality of the order, then my take.

What the left is saying.

  • Many on the left argue that the HEROES Act does explicitly authorize the program Biden implemented.
  • Some argue that either way, the plaintiffs that Republicans found don't have standing to sue.
  • Others say the arguments went surprisingly well for the Biden administration, even if they are still likely to lose.

In Vox, Ian Millhiser argued that the HEROES Act explicitly authorizes the program Biden put into place.

"The Heroes Act was enacted in the wake of the 9/11 attack on the World Trade Center, to ensure that student borrowers who are impacted by a 'war or other military operation or national emergency' are 'not placed in a worse position financially' because of that emergency," Millhiser said. "Although it was initially enacted on a temporary basis in 2003, primarily to benefit victims of the 9/11 attack and military servicemembers who may struggle to pay back their loans if they are called to active duty, Congress made the Heroes Act permanent in 2007. The Heroes Act does have some important limitations, the most important of which is that the secretary’s power to alter student loan obligations is only triggered when the president declares that a 'national emergency' exists, and it only extends to military personnel and other individuals impacted by that emergency.

"But when such an emergency — like the 9/11 attack or the Covid-19 pandemic — arises, the Heroes Act speaks in sweeping terms about the secretary’s power to alter loan obligations. Under the statute, 'the Secretary is authorized to waive or modify any provision' of the federal laws governing student loans — including the provisions governing borrowers’ obligation to repay their loans, and the provisions governing cancellation of student loans. This power may be exercised 'as the Secretary deems necessary in connection with a war or other military operation or national emergency.'... The Heroes Act also permits the secretary to forgive loans en masse, rather than requiring the Education Department to individually determine which borrowers are eligible. According to the statute, 'the Secretary is not required to exercise the waiver or modification authority under this section on a case-by-case basis.'"

In Slate, Mark Joseph Stern said the arguments went well for Biden all things considered, though smart money is still on the court striking the law down.

"If the Supreme Court truly practiced textualism, this would be an easy case. The liberal justices hit this point over and over again on Tuesday. 'Congress could not have made this much more clear,' Justice Elena Kagan told Nebraska Solicitor General James Campbell, who argued against the program… "But most of the conservative justices have devised a tool to wriggle out from under the text of a law: the 'major questions doctrine,' a dubious and ill-defined rule that courts can use to strike down any policy that presents a 'major question' if Congress has not authorized it explicitly enough. (How major? Nobody knows.)... [Justice Kavanaugh] asked Prelogar if she 'would recognize at least that this is a case that presents extraordinarily serious, important issues,' requiring the court to look at it 'a little more strictly than we might have otherwise to make sure that this was something that Congress would have contemplated.'

"These questions on the merits, however, often took a back seat on Tuesday. Front and center, instead, was the threshold problem: the argument for why they were there in the first place. The plaintiffs have struggled mightily to explain why they have standing to sue at all," he said. "This doctrine requires plaintiffs to prove three things: a concrete injury, a direct connection between the injury and the government’s action, and a potential form of relief that would redress that injury. Standing is a problem for the plaintiffs because it’s not clear that anyone is actually injured when the government wipes student debt off the books. The government, after all, holds that debt already. (A small subset of loans are held by private institutions, but those are not included in Biden’s plan.)"

In MSNBC, Jordan Rubin emphasized that neither of the plaintiffs appeared to have "standing."

"It’s a conservative idea, broadly speaking, that can be used to shut the courthouse door to claims. But Tuesday’s arguments showed the absurdity of the legal challenge from Republican-controlled states, including Missouri, which pressed a standing argument based on the relief program’s impact on the Missouri Higher Education Loan Authority. Though that sounds like something that could make sense, the loan authority is an independent entity that could’ve brought its own suit but didn’t," Rubin said. "As Justice Ketanji Brown Jackson pointed out in arguments, using the loan authority’s acronym: 'If MOHELA is being injured as a result of the plan, or at least if that’s the allegation, MOHELA has the ability to defend itself and its interests.' The court would be 'breaking new ground' if the justices found standing on that basis, Jackson said.

"Of course, it’s not surprising that Democratic-appointed justices pressed the standing issue. But they didn’t have much company. NBC News’ Lawrence Hurley reported: 'Of the six conservative justices, only Justice Amy Coney Barrett repeatedly probed whether challengers had legal standing.' Other conservatives’ lack of focus on standing, coupled with what they did focus on, is reason to concern the Biden administration... That’s all to say that in the forthcoming student debt opinion, which is expected by late June, don’t be surprised if the majority sidesteps obvious standing problems and then, on the merits of the issue, rules that the administration overreached, based on the made-up 'major questions' doctrine."

What the right is saying.

  • Many on the right argue Biden overreached, and the program should be struck down.
  • Some say no reasonable person understood the context of the HEROES Act to allow for a half trillion dollars of student loan cancellation.
  • Others say the states have standing, as even Biden's lawyers admitted there was financial injury being done.

In USA Today, Ingrid Jacques said Biden's student loan program is an abuse of power, and the Court must rule against it.

"The high court has already struck down several similar attempts from Biden officials. For instance, in 2021, the Supreme Court overturned the administration’s continuation of the eviction ban,” Jaques wrote. “And in January 2022, the court ruled against the Biden mandate to force COVID-19 vaccination or testing requirements on large businesses. Similarly, the court in June ended the Environmental Protection Agency’s attempts to regulate power plant emissions. In all these cases, the issue at hand was overreach by administration officials... The merits of this case are no different. The Pacific Legal Foundation filed the first major lawsuit against the student loan forgiveness plan in September, and while its case is not one before the Supreme Court, it also filed a recent amicus brief on behalf of several former lawmakers.

“These lawmakers were instrumental in the passage of the 9/11-era HEROES Act – the law that Biden has used to justify the loan cancellation. They argue that the law was never meant to be used so broadly,” she added. “Rather, it was targeted to aid service members who were at war... Biden has acknowledged several times in the past year that the “pandemic is over” and has finally set an end date for the dual COVID emergency declarations. Biden's claim that the pandemic hurt student loan borrowers is why the HEROES Act has been used as the basis for his plan. Take away that emergency and there isn’t any legal justification left.”

National Review's editors called it a "legal reckoning" on student loans.

“The president’s abuse of ‘emergency’ wartime powers passed in the 2002 HEROES Act is nothing less than lawless royalism," they wrote. "The statute says that the secretary of education can 'waive or modify any statutory or regulatory provision applicable to the student financial assistance programs' when 'necessary in connection with a war or other military operation or national emergency.' Chief Justice John Roberts set the tone for the argument by noting that Justice Antonin Scalia once observed that 'modified in our view connotes moderate change. He said it might be good English to say that the French Revolution modified the status of the French nobility, but only because there’s a figure of speech called understatement and a literary device known as sarcasm.'

“Moreover, the chief justice observed that, even if terms such as 'waive or modify' could be construed to encompass the outright cancellation of student debt, the Court’s 'major question doctrine' requires more — namely, a citation to 'clear congressional authorization' of the specific action taken by the administration,” they said. “No one can plausibly claim that the HEROES Act even anticipated, much less green-lighted, half a trillion dollars in relief to a favored class of debtors without additional congressional input...The administration’s lawyers kept rewriting the rules for the programs to include anyone who tried to sue to stop them, with the aim of depriving those challengers of legal standing to sue. Despite their best efforts, however, Biden’s solicitor general was compelled to concede that MOHELA, a public instrumentality of the State of Missouri, would suffer a financial injury from the program because it holds interests in outstanding loans.

In City Journal, Ilya Shapiro explained why the text of the HEROES Act makes this an executive overreach.

“The government’s lawyers now make the following assertions before the Supreme Court: the Covid-19 pandemic is a national emergency (or at least was at the time the plan was announced); every federal student loan borrower either lives in a Covid disaster area or has otherwise been financially affected by that emergency; as a result of that emergency, some borrowers will default on their loans once payments finally resume after a multiyear pause; and forgiving some (or all) of the borrowers’ principal balances will ensure their overall risk of default is no worse than it was before the pandemic,” he wrote. “That last assertion runs headlong into a key limiting word in the text of the HEROES Act: ‘necessary.’

“Most of the steps in this Rube Goldberg device of a financial plan are far from necessary to achieve their final aim, because a simpler and more direct method is available. If the government’s purpose were truly to reduce the harm of more defaults, it could put borrowers on income-based repayment plans and, even more simply, waive some of the legal consequences of missed payments,” Shapiro said. “Forgiving $400 billion of debt so that fewer people will suffer penalties for missed payments is like cutting $400 billion in income taxes so fewer people will suffer IRS underpayment penalties. The ‘major questions doctrine,’ which the Court has increasingly applied, makes this an easy case. Since Biden’s executive action was not ‘necessary’ to achieve the government’s aim, the statutory text lacks a clear statement granting the secretary such power.”

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism, or compliments, don't unsubscribe. You can reply to this email and write in. If you're a subscriber, you can also leave a comment.

  • I have never believed Biden had the authority to cancel this much student debt.
  • Going in, it seemed the biggest issue for Republicans was the question of standing.
  • After hearing oral arguments, I'm surprised how poorly prepared the Republican states were to make the case they had standing.

Last time we wrote about the legality of this cancellation, I said that it was clear to me that Biden was using the HEROES Act in a context Congress hadn't intended. Several lawmakers who drafted that law have said as much in an amicus brief, and plain common sense will get you there. The bill was passed in the wake of 9/11 and was primarily intended to give soldiers who were deployed overseas relief from their student debt (secondarily, it was also drafted to help people facing natural disasters).

Further, Biden's plan is overly broad and does not have nearly enough tests to ensure it is addressing "affected individuals" who are "placed in a worse position financially" because of the emergency it is ostensibly responding to (in this case, Covid-19). As I wrote in August, not everyone with student debt who made less than $125,000 in 2020 and 2021 is now worse off financially because of the pandemic. Some are very obviously doing better. This is to say nothing of the fact the Biden administration has been inconsistent with its framing of whether we were in a national emergency or not.

Given that I also took a pretty clear stance against the merits of the cancellation, with the caveat that more targeted debt cancellation would be an effective and just economic stimulus, I was expecting to clearly side with conservatives and the right-wing justices in this case. But my previous suspicions that it would be hard for Republicans to find a legitimate plaintiff have been borne out.

No commentators seem to be taking the individual borrowers suing the Biden administration seriously, so I'll only give them brief attention here. The entire premise of their argument appears to be that striking down this law would guarantee the Biden administration introduces a different law that does benefit them, which is obviously not guaranteed. They also argue that they had no way to publicly comment on the program, but The HEROES Act is quite explicit that public comments are not required for the Secretary of Education to modify the program. Their arguments seem entirely self-defeating.

The states have a better argument, but they too have a standing problem. As the liberal justices were quick to point out, MOHELA didn't even show up to court. Indeed, the state seems to be suing on behalf of MOHELA and without its consent. They had to file a Freedom of Information Act (FOIA) request just to get internal details about the program so they could compile their case against the Biden administration. This is how the conservative National Review editorial board navigated that reality in making their case against Biden:

Tuesday’s arguments focused on narrow and technical questions of Missouri law regarding the state’s ability to sue on behalf of a public entity that it has created and whose board is appointed by the governor and other state agencies — albeit one that could have sued on its own, chose not to, and declined to join or cooperate voluntarily in the state’s lawsuit. While the justices are prudent to take care not to unduly widen the courthouse door to everyone who dislikes a federal policy, it does no violence to the law of standing to allow state governments to vindicate the rights of state-government entities that have unquestionably suffered harm from an overreaching president claiming vast emergency powers over domestic politics.

If that reads a bit like mental gymnastics, it's because it is. What’s not in question is whether anyone is "doing violence to the law of standing," which is a bizarrely concocted standard. I have no idea what “doing violence” to a law means. What is in question is just technical: Do the states have standing or not? And while it's true Biden's solicitor general admitted MOHELA might suffer financial injury from the law, that still doesn't answer why MOHELA isn't suing on its own behalf, or why the state is essentially forcing a lawsuit on its behalf, much less how these states are being harmed by the potential of an independent loan servicer losing money.

Again, I was surprised to see the state's lawyers unprepared to navigate this question, as it was the obvious and central tension in the case. Even Justice Amy Coney Barrett seemed a little shocked:

"It would be hard to see how a win for the state would benefit MOHELA, or a win for MOHELA would benefit the state, if the assets are completely separate — you don't get any money out of it," Barrett told Nebraska Solicitor General James Campbell, who's representing the states... "If the state wanted money from MOHELA right now, does the state have the authority to do that?"

Campbell claimed the state had an interest in protecting MOHELA, and the state legislature could theoretically take action to request money, but Barrett seemed unconvinced. "Do you want to address why MOHELA's not here?" she asked. Campbell maintained the state "has the authority" to speak for MOHELA, but couldn't seem to explain why or how.

Ironically, challenging standing is a traditionally conservative legal tactic. As Stern rightly pointed out, "For decades, conservative justices have deployed this doctrine to defeat progressive litigation." It would be incredibly inconsistent for the conservative justices not to address the question of standing clearly here.

Still, I’m not sure there is a fifth vote to throw this case out on the issue of standing. If five justices allow the case to move forward on the standing issue, it seems like a sure thing that loan forgiveness will be struck down. Despite entering oral arguments with the bias that Biden had overreached and the program should probably be struck down, I was left wondering whether either of the plaintiffs Republicans found actually belonged in the courtroom in the first place.

Your questions, answered.

We're skipping today's reader question to keep the newsletter a reasonable length. Want to have a question answered in the newsletter? You can reply to this email (it goes straight to my inbox) or fill out this form.

The Blindspot Report.

Once a week, we present the Blindspot Report from our partners at Ground News, an app that tells you the bias of news coverage and what stories people on each side are missing.

One story the left missed is how the university of North Carolina dropped its Diversity, Equity, and Inclusion hiring requirement amid growing backlash.

One story the right missed was a new analysis showing that, in Britain, Black people are seven times more likely to die after being restrained by police.

Under the radar.

Supplemental Nutrition Assistance Program (SNAP) benefits that were boosted during the pandemic are set to end this month. Tens of millions of Americans in 32 states who received extra government assistance to pay for food will see that assistance end. Congress passed the Families First Coronavirus Response Act in 2020 to temporarily boost food stamps, and it’s estimated that it kept 4.2 million people out of poverty during the pandemic. Over the last three years, roughly $98 billion of extra assistance was distributed. Families in the remaining states will lose about $95 per month. The Wall Street Journal has the story.


  • $1.6 trillion. The amount of student debt owed by borrowers.
  • $400 billion. The estimated cost of Biden's cancellation program over 30 years.
  • 40 million. The estimated number of people eligible for the program.
  • 26 million. The number of borrowers who applied for the program.
  • 16 million. The number of borrowers who were approved for the program.

The extras.

  • One year ago today, we covered the beginning of the 2022 midterms.
  • The most clicked link in yesterday's newsletter: For the first time, it was an advertisement (showing only to free readers) for the financial newsletter The Gist.
  • Leakage: 53.2% of Tangle readers (!) said they believe Covid-19 escaped from a laboratory, 7.9% said it was zoonotic, and 30% said they weren't sure.
  • (Mostly) nothing to do with politics: There were 313 new words added to’s online dictionary, including "ecofascism" and "deadass."
  • Take the poll: Do you think Biden's student debt cancellation is legal? Let us know.

Have a nice day.

A new study confirms what many parents and teenagers probably suspect: Less screen time improves teenagers' feelings about themselves. American teens spend more than eight hours a day on screens, and concerns are growing about how that impacts their mental health. On Thursday, the American Psychological Association published a new study that followed hundreds of teenage participants who experienced symptoms of anxiety and depression. In a matter of three weeks of reduced screen time, they saw noticeable differences in how participants rated their satisfaction with their own weight and looks. “This randomized controlled trial showed promising results that weight and appearance esteem can improve when people cut back on social media use,” wrote psychologist Andrea Graham. Oregon Public Broadcasting has the story.

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Isaac Saul
I'm a politics reporter who grew up in Bucks County, PA — one of the most politically divided counties in America. I'm trying to fix the way we consume political news.