A little over a year ago, In Biden vs. Nebraska (2023), the Supreme Court struck down one of the Biden administration’s student loan forgiveness plans. The court’s decision took extraordinary liberties with the law, misreading a statute that expressly authorized the plan and relying on a doctrine known as the “prime question.”
The main question doctrine, as I have previously explained at length, has no basis in any federal law or constitutional provision, and appears to have been created entirely by the right side of the Court. Some defenders of the doctrine claim that it goes back to a 2000 Supreme Court decisionBut the very strong version of the key question doctrine that Republican justices often invoke to block President Joe Biden’s policies didn’t emerge until after he became president.
In applying the doctrine between NebraskaHowever, the court struck down one of several programs created by the Biden administration to ease the student loan burden. Now, in a case known as Alaska vs. Cardona, a trio of red-state attorneys general is asking the Supreme Court to invalidate much of a separate student loan plan that relies on an entirely different law to justify its existence. (“Cardona” in this case is Secretary of Education Miguel Cardona.)
Plan at issue Alaska The case is known as savings or “conservation” plans on valuable education. Cost estimates vary, and they nearly tripled to $137.9 billion over a decade. republican Objection to cost of SAVE plan. Plaintiffs challenging the plan rely heavily on NebraskaAnd the doctrine in the main question is at the heart of the case, among them Brief of Justices.
The Alaska The case is raised in the court’s “shadow docket,” a mix of urgent motions and other matters that the court can decide on an expedited basis. So a decision Alaska The case will probably be transferred soon.
inside it Brief of Justices, the Biden administration offers several persuasive reasons why the court should stay hands. But, to be honest, later Nebraska, it is difficult to determine whether legal arguments play a role in the student loan cases the Supreme Court takes Decide between Nebraska So outrageous — so lacking in respect for the statutory text — that it’s unclear whether any student loan plan created by this Democratic administration could get a fair hearing in this GOP-controlled Supreme Court.
What is at stake? Alaska?
Bet immediately Alaska Case is slightly smaller than them Nebraska. The program at issue in the latter case would directly cancel at least $10,000 in student loans for student borrowers earning less than $125,000 a year. program at issue Alaska, conservation planning, more complicated. It has three parts, and only one of those parts is currently before the justices (though challenges to the other two parts are likely to eventually go to court).
Save Plan Makes three significant changes Known as “Income Contingent Repayment Plan”. Under these plans, a certain amount of each borrower’s income is protected from student loan repayments.
Before the SAVE Plan, a borrower earning up to 150 percent of the federal poverty level (about $22,000 with no dependents) did not have to make student loan payments. And borrowers who earn more than this amount can subtract the amount from their income when determining how much they owe. The SAVE plan increases the amount of protected income from student loan repayments to 225 percent of the poverty level (or just $33,000 a year for a single-income earner with no dependents).
Additionally, prior to the SAVE Plan, student loan payments were limited to 10 percent of each borrower’s residual income. The SAVE plan lowers that cap to 5 percent.
Finally, before the SAVE Plan, borrowers could have their loans forgiven after making payments for 20 to 25 years. SAVE Plans accelerate this schedule, allowing some borrowers to have their loans forgiven after just 10 years.
The specific issue before the Supreme Court right now is whether the second of those three changes — the decision to lower the cap from 10 percent to 5 percent — is authorized by federal law. Two other parts of the SAVE plan are likely to eventually come before the justices.
The biggest obstacle to the SAVE plan is the court decision Nebraska
To protect the provisions of the SAVE Plan at issue AlaskaThe Biden administration initially pointed to a federal law that provides that income-generating loans “shall require payments that Corresponding to the appropriate portion of the borrower’s annual income (and the borrower’s spouse, if applicable) as determined by the Secretary.” This language provides strong support for the proposition that the Secretary of Education, not the Supreme Court, may determine what percentage of the borrower’s income must be repaid each year.
inside NebraskaHowever, the six Republican justices in the majority appear to have divorced the analysis of student loan policy entirely from the text of federal law.
Student loan policies in Nebraska was authorized by an Act known as Heroes Act, which gives the Secretary of Education “broad authority to waive or modify any statutory or regulatory provision applicable to the student financial aid program … as the Secretary deems necessary in cases of war or other military operations or national emergencies.” The Biden administration has cited the Covid pandemic as a “national emergency” that triggered the Heroes Act.
This one provision of the Heroes Act alone should have been enough to justify the student loan forgiveness program. NebraskaBut that law also contained other provisions that should have removed doubt that the education secretary had the authority to create the loan forgiveness program that the Republican justices rejected.
Among other things, the HEROES Act waived a lengthy process known as “notice and comment” that federal agencies must undergo before changing federal policy. It provides that the Secretary may forgive debts a lot (“The Secretary is not required to exercise waiver or modification authority under this section on a case-by-case basis”). And the HEROES Act instructs courts not to construe other federal statutes to limit the Secretary’s debt forgiveness authority unless that statute is “enacted with specific reference” to the HEROES Act.
It’s hard to imagine a law, in other words, that more clearly indicates that the secretary should be allowed to cancel student loans during a national emergency, regardless of whether the political party controlling the Supreme Court agrees with the secretary’s decision.
nevertheless, Nebraska Incredible concluded that the student loan forgiveness program in that case was not authorized by the Heroes Act. It also claimed that the program violated the so-called “leading question” doctrine.
The major question doctrine—which, again, appears in no statute or constitutional provision and was created entirely by recent Supreme Court decisions—provides that Congress must “speak expressly if it wishes to assign a decision to an agency of great ‘economic and political significance. . . .’ “
Student Loan Forgiveness Program Nebraska Hundreds of billions of dollars in student loan debt will be wiped out, so it’s probably a matter of great economic significance. But even if one concedes this point, it is still difficult to conceive of a law that speaks more clearly than the Heroes Act.
Congress has given the Secretary wide powers. It waived the Secretary’s usual procedural limitations. This clearly empowered him to grant relief to many borrowers at a time. And it prohibited the court from reading any federal law to limit the Secretary’s authority unless that law specifically referred to the Heroes Act.
The Nebraska In other words, the decision was so poorly reasoned that it raises serious questions about whether the Republican justices were interpreting the law in good faith. And it doesn’t bode well for the alternative student loan plans at issue Alaska.
What are the best arguments for the plan at issue Alaska?
Again, federal law provides that the Secretary of Education may determine “an appropriate portion of the borrower’s annual income” that must be repaid. This language provides very strong support for student loan plans currently before the courts.
There is also some doubt as to whether the court has jurisdiction to entertain this suit. A federal court cannot hear a case challenging a federal policy unless the plaintiff can show that they have been injured in some way by that policy. Red-state plaintiffs essentially argue that they are injured because the SAVE plan would force some borrowers who owe money to those states to repay those loans more quickly, depriving the states of interest on the loans. (To complicate matters, states will be repaid in full, even if the borrower defaults on a portion of their loan.)
But it’s not clear that a state is hurt by early debt repayment — if the state wants to earn interest income, it can always invest the repayments in something else that pays interest. As the Biden administration put it in its brief, “Full repayment ‘would normally be cause for celebration, not litigation.’“
Finally, the Biden administration pointed out a significant difference between the SAVE plan and the plan at issue Nebraska. inside NebraskaThe Supreme Court faulted the Biden administration for creating what it claimed was “Novel and fundamentally different loan forgiveness programs” from something that previously existed.
Save Plan, in contrast, does not constitute a fancy program. It takes an existing program that limits student loan payments and exempts a certain amount of income from loan repayments and simply lowers the cap and increases the exemption amount.
Will these arguments be enough to save the save plan? Maybe in any court that is interested in following the law. after NebraskaHowever, it is not clear that this Court intends to do so.
