Supreme Court 'Skeptical' Of Student Debt Relief, If You Can Believe That!
The Supreme Court heard oral arguments yesterday in two cases challenging President Joe Biden's student debt relief plan, and dear readers, we hope you are sitting down for this: The Court's rightwing majority didn't sound very open to the idea that the administration has the authority to forgive student loans, even under the 2003 law that the administration says is designed to allow exactly that. We won't know for sure until the Court rules in the case, probably in June.
If there's any chance for the policy to escape being overturned, it probably hinges on whether the Court decides that the plaintiffs in the two cases have standing to sue at all. If the Court decides they don't, then it won't address the legality of the program either way.
Of course, this being the Alito Court, it's also possible the Supremes will just make shit up and decide that even if the plaintiffs lack standing, some obscure principle pulled from Brett Kavanaugh's beer cooler — if you know what we mean and we're not sure we do — makes it OK to address the merits of the case anyway.
Under the Biden plan, borrowers could have up to $10,000 of federal student debt forgiven; borrowers who received Pell Grants for low income families qualified for up to $20,000 in debt cancelled. The vast majority of debt relief was targeted at middle and lower-income borrowers.
Solicitor General Elizabeth Prelogar argued that the 2003 HEROES Act gives the Education Department all the authority it needs to make changes to student loan programs in a time of national emergency, since the law says the Education secretary has power to "waive or modify any statutory or regulatory provision" to keep borrowers from being wiped out financially during "a war or other military operation or national emergency." And here we are, in a public health emergency so severe that most federal student loan payments have already been put on hold for almost three years.
Justice Elena Kagan agreed, saying that "Congress could not have made this much more clear," and saying that compared to a lot of other cases, this was a slam dunk: "We deal with congressional statutes every day that are really confusing. This one is not."
But of course nothing is clear if you don't want it to be, so Chief Justice John Roberts kept insisting that whatever the plain text of the HEROES Act says, the total estimated cost of the debt relief program — about $400 billion over the next decade — was so big that it would need a specific extra double supersecret authorization from Congress, because of the "major questions doctrine" the Court pulled out of its ass in earlier cases under Roberts. To help make his point, Roberts repeatedly rounded that cost up by another hundred billion dollars, calling it a "half trillion dollar" program again and again.
Prelogar pointed out that the Education secretaries under both Donald Trump and Joe Biden have already used their authority under the HEROES Act to put federal student loans in forbearance, with no interest accruing, since March of 2020. Pausing loan payments, she said, means the federal government has lost roughly $100 billion a year, according to the Government Accountability Office.
"That has been an economically significant program,” Ms. Prelogar said of the pause. “It’s currently costing the federal government more per year than this loan forgiveness plan would cost the government annually.
What's more, Prelogar said, ending that pause without also relieving debt would mean that scads of borrowers would default on their loans altogether, which could result in a shock to the economy at large. She didn't even get into the fact that if hundreds of thousands of people default, that's going to cost the federal government a lot, plus the knock-on effects of those people being ruined financially.
Justice Sonia Sotomayor echoed that argument, pointing out that the stakes for low-income borrowers could be pretty darn catastrophic:
There’s 50 million students who are – who will benefit from this. Who today will struggle. Many of them don’t have assets sufficient to bail them out after the pandemic. They don’t have friends or families or others who can help them make these payments. [...]
And what you’re saying is now we’re going to give judges the right to decide how much aid to give them instead of the person with the expertise and the experience, the secretary of Education who’s been dealing with educational issues and the problems surrounding student loans.
We thought it was a pretty good argument, but then we're liberal simps who think the government is there to help people, so we don't count.
The question of whether the challengers to the policy have standing may be the best hope for the loan forgiveness program, since some of the rightwing justices seemed more skeptical of their claims that they'll be harmed by student debt relief. We'll just go with the CNN summary here:
In Biden v. Nebraska, a group of Republican-led states argued the administration exceeded its authority by using the pandemic as a pretext to mask the true goal of fulfilling a campaign promise to erase student loan debt.
The second case is Department of Education v. Brown, which was initially brought by two individuals who did not qualify for the full benefits of the forgiveness program and argue the government failed to follow the proper rulemaking process when putting it in place.
In the case involving the states, much of the argument involved how many angels can dance on the head of Missouri's nonprofit agency what processes student loans, the "Missouri Higher Education Loan Authority," aka MOHELA. It was set up to insulate the state itself from having to process loans, but the state is arguing that, for the purpose of standing, it may as well be the state.
But as Justice Kagan pointed out, MOHELA is a legally separate entity, and it didn't choose to sue:
“Usually we don’t allow one person to step into another’s shoes and say, ‘I think that that person suffered a harm,’ even if the harm is very great,” she said.
If Missouri really controlled the loan authority, Justice Amy Coney Barrett asked James A. Campbell, Nebraska’s solicitor general, who represented the states, “why didn’t the state just make MOHELA come then?”
Campbell explained that was "a question of state politics," which sounds to us like some bullshit, although we are not a lawyer.
Prelogar hammered on that point, saying that MOHELA would definitely have standing if it had sued, but it hadn't, now had it? Justice Ketanji Brown Jackson chimed in too, saying that MOHELA's
financial interests are totally disentangled from the state, it stands alone, it’s incorporated separately, the state is not liable for anything that happens to MOHELA. [...] I don’t know how that could possibly be a reason to say that an injury to MOHELA should count as an injury to the state.
In the other case, the plaintiffs argued that the program isn't fair, because their own loans don't qualify for forgiveness. One plaintiff, Myra Brown, has private student loans that aren't held by the government, and the other, Alexander Taylor, only qualifies for $10,000 in loan relief because he didn't get a Pell grant in college, so his case claims he was cheated out of $10K in debt relief.
No, it doesn't make a damn bit of sense that they think the solution to their woes is to eliminate all debt relief for 40 million other people. But there we go, thinking like a blogger instead of a Supreme Court justice. The New York Times notes that
Justices across the ideological spectrum seemed unpersuaded by the borrowers’ position.
“Talk about ways in which courts can interfere with the processes of government through two individuals in one state who don’t like the program can seek and obtain a universal relief barring it for anybody anywhere,” Justice Neil M. Gorsuch said.
Even so, some justices were really excited about the supposed "unfairness" of targeting debt relief to people who had the most to lose, and not to everyone who might conceivably get help. Roberts even wondered why it would be fair to relieve debt for student loans during the pandemic but not for, say a loan taken out by a hypothetical owner of a lawn care business.
Sotomayor had a pretty quick reply to that, pointing out that "everybody suffered in the pandemic, but different people got different benefits because they qualified under different programs." Hello, PPP loans, for freaking instance (this is us cheerleading, not Sotomayor). (Also, your Wonkette got a PPP loan, and it was forgiven, which is the first time we've ever been part of the "so rich the government gives you money" crew.)
Justice Kagan reminded Roberts that the case is actually about student loans, not anything else, mister strict constructionist:
Congress passed a statute that dealt with loan repayment for colleges, and it didn’t pass a statute that dealt with loan repayment for lawn businesses... [Us, butting in again: PPP loans! We already said PPP loans, Elena.] And so Congress made a choice, and that may have been the right choice or it may have been the wrong choice, but that’s Congress’s choice.
The Court will rule in June, and even if the debt forgiveness program is thrown out, many borrowers should at least be able to get some relief under the Biden administrations' revamped income-based repayment program, which everyone with federal student loans should at least look into.
DO THIS NOW!
Did Joe Biden Just Fix Student Loan Debt Going Forward? Mayyyyybe!
I Got My Student Loans Ready For Joe Biden's Big Income-Based Forgive-A-Thon And You Should Too
Until of course conservative states and the SCOTUS fuck that over too, the end.
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Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.