Notice that the student loan debt cancellation plan, although supposedly enacted to deal with the Covid emergency, was created by the Department of Education only "a few weeks before President Biden stated that the 'pandemic is over.'" (p. 5)
Standing Issue:
It does not appear that any of the states had standing in their capacity as states by the loan cancellation program. However, the Court holds that Missouri has standing because MOHELA, a nonprofit corporation the Court identifies as a "public instrumentality" of the state, has suffered a concrete injury in fact because it would lose some $44 million a year in servicing fees due to so many borrowers whose student loans would be completely discharged under the cancellation plan.
The dissent makes a persuasive argument that the injuries to MOHELA may not be claimed by the state of Missouri. The standing holding is the weakest part of the Court's opinion.
The Merits
Does the Heroes Act grant President Biden and his Secretary of Education power to cancel $430 billion of student loan principal? The Court held "that the Act allows the Secretary to 'waive or modify' existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up." (p. 12) As Chief Justice Roberts puts it, to "modify" permits minor or moderate adjustments, but does not "authorize 'basic and fundamental changes in the scheme' designed by Congress." (id). The Secretary's modifications created a "novel and fundamentally different loan forgiveness program" canceling $10000 of student debt for every borrower with an income below $125,000 "no matter the circumstances." (p. 14). As Chief Justice Roberts puts it, "[t]he Secretary's plan has "modified' the cited provisions only in the same sense that 'the French Revolution modified the status of the French nobility--it has abolished them and supplanted them with a new regime entirely." (p. 14-15). Nor does it help the Secretary to claim that he is simply "waiving" loan balances or the obligation to repay." (p. 15-16)
Focusing on West Virginia and the major questions doctrine, Roberts concluded that "[t]he 'economic and political significance' of the Secretary's action is staggering by any measure." (p. 21) The economic impact "amounts to nearly one-third of the Government's $1.7 trillion in annual discretionary spending." Moreover, the "Secretary's assertion of administrative authority has 'conveniently enabled [him] to enact a program' that Congress has chosen not to enact itself." (p. 21-22) Notice that even Speaker Pelosi had stated:
“People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.” Press Conference, Office of the Speaker of the House (July 28, 2021).
Chief Justice Roberts concluded:
Imagine instead asking the enacting Congress a more pertinent question: “Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?” We can’t believe the answer would be yes. Congress did not unanimously pass the HEROES Act with such power in mind. “A decision of such magnitude and consequence” on a matter of “ ‘earnest and profound debate across the country’” must “res[t] with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.” (p. 22)(Citing West Virginia)
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