WASHINGTON – The Supreme Court’s conservative wing signaled deep skepticism Tuesday over President Joe Biden’s plan to wipe away $400 billion in student loan debt, suggesting the administration may have overstepped its authority by creating a program estimated to benefit more than 40 million borrowers.
Over the course of several hours, a majority of the justices repeatedly turned to questions about the law Biden relied on to create the program – and whether the law gave him that power. The court will not issue its decision in the two cases until later this year and the position justices signal at arguments don’t always predict the outcome of the case.
Six conservative states and two borrowers sued over the program and there has been considerable debate, heading into the arguments, over whether they were the right parties to sue. But that issue largely took a backseat to broader questions about Biden’s authority.
“We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Cheif Justice John Roberts said. “This is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that significance.”
Here’s a look at what’s happening at the Supreme Court.
What is the Federal Family Education Loan Program? And what does it have to do with the mass forgiveness plan?
Myra Brown, one of the plaintiffs in the suit backed by the Job Creators Network Foundation, holds debt issued through the Federal Family Education Loan program.
This is a specific type of student loan backed by the federal government but held by private entities. The program has since been discontinued as the government now directly issues student loans. But many people still carry debt in the form of a FFEL loan.
Borrowers in the FFEL program were cut out of the administration’s mass debt forgiveness plan. When the plan was first announced, they had been able to consolidate their debts into a loan owned directly by the federal government. That transfer would then allow borrowers to access the debt relief program.
But by Sept. 29, 2022, the administration barred FFEL borrowers from relief even through consolidation. That move followed one of the many lawsuits filed to challenge Biden’s mass debt forgiveness plan.
MOHELA, the quasi-state agency based in Missouri, oversees these FFEL loans in addition to direct loans. The justices have debated what role the loan servicer should play in the litigation.
– Chris Quintana and Nirvi Shah
Elena Kagan, Ketanji Brown Jackson lean toward Biden plan on fairness concerns
Two of the high court’s liberal justices, appearing to side with the Biden administration, pushed back at criticism from some of the conservative justices that the Biden student loan debt forgiveness program is unfair.
“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,” Associate Justice Elena Kagan said. “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.”
Associate Justice Ketanji Brown Jackson also questioned the fairness argument.
“I just don’t know how far we can go with this notion of, to the extent that the government is providing much-needed assistance to people in an emergency, it’s going to be unfair to those who don’t get the same benefit.”
– Joey Garrison
How much would the student loan forgiveness plan cost?
Estimates for the overall cost of the program vary, but the Congressional Budget Office estimated the plan would cost about $400 billion. The agency, however, said its estimate was “highly uncertain.” The Committee for a Responsible Federal, a nonprofit, put the cost of the forgiveness plan at about $360 billion.
– Chris Quintana
More:Biden’s student loan forgiveness will cost US about $400 billion, CBO estimates
John Roberts, Samuel Alito raise concerns about ‘fairness’ with Biden’s plan
Chief Justice John Roberts raised what he called “the fairness argument,” echoing a common criticism from opponents of President Biden’s student loan program who argue it punishes Americans who couldn’t afford college or worked hard to pay off their loans.
Roberts introduced a hypothetical situation of two high school graduates, neither of whom could afford college. One took out a loan to attend. The other started a lawn care business with help from a bank loan instead of going to college.
“At the end of four years, we know statistically, that the person with the college degree is going to do significantly financially better over the course of life than the person without,” Roberts said. “And then along comes the government and tells that person, you don’t have to pay your loan.”
Roberts said the person who started a lawn care service still had to pay off their business loans “even though his tax dollars are going to support the forgiveness of the loan for the college graduate who is going to make a lot more than him over the course of his lifetime.”
Associate Justice Samuel Alito echoed those concerns. “I think it’s a fair question to say, what is your client’s view about the fairness question that some people have posed, and that was really reiterated for you by the chief justice?
U.S. Solicitor Genreal Elizabeth Prelogar responded by saying that Congress, by passing the HEROES Act, has made the judgment that the education secretary can provide student loan relief during emergencies like the COVID-19 pandemic.
“You can make this critique of every prior exercise of HEROES Act authority,” she said.
– Joey Garrison
John Roberts: ‘More than half the people’ don’t need help on student loans
Chief Justice John Roberts pressed the Biden administration on its own findings that more than half of borrowers predicted they would be able to repay their loans – and suggested, given that, Congress should be the entity that decided how to structure the program.
“If more than half the people say they don’t need this relief, extending relief to that breadth certainly raises questions,” Roberts argued.
Elizabeth Prelogar, the Biden administration’s attorney, countered that in some higher income brackets that might be the case but not so much for Americans making less money.
– John Fritze and Joey Garrison
Crowd outside Supreme Court thins, though feelings on loan forgiveness remain strong
A crowd of largely Black and Latino students, borrowers, advocates and politicians started to dissipate after an hours-long rally for loan forgiveness in front of the Supreme Court. Against a backdrop of Bob Marley music, activists had begun packing away their signs reading “Drop the Debt,” “Student Debt Cancellation Is Legal,” “Dreams Not Debt” and “C.L.E.A.R. My Student Loans.”
C.L.E.A.R. stands for Cancel Loans for Education and Restoration and is a campaign by the New Georgia Project, the state’s largest civic engagement group. Students and borrowers with the group arrived at the rally, which featured a slate of high-profile speakers, late, their overnight bus from Georgia having run into some hiccups along the way.
Maggie Bell, the group’s lead organizer, said she wasn’t fazed by the travel snafu nor the lukewarm prospects of a supportive ruling from the court. “We’re going to see cancellation through now,” she said, noting the group rallied for forgiveness outside the White House and U.S. Education Department last year. “We didn’t start this not to see it finish.”
Bell, 24, attended Albany State University, a Georgia HBCU, with a Pell Grant and has roughly $40,000 in debt. Of that, $30,000 is in the form of federal loans, so Biden’s proposal to erase $20,000 of her debt would be life-changing.
Such relief would be particularly vital for Black and Brown borrowers, Bell said. Black borrowers, for example, generally take on more student debt than their white counterparts.
“We get sold on this idea of the American Dream, where you get your degree and then it’s open access to your dream career, dream car, house, starting a family,” she said. Loan forgiveness, she continued, could serve as a form of reparations for these communities.
– Alia Wong
More:Student debt relief blocked, potentially hurting Black and Latino families the most
Prelogar: If Biden could postpone student loan debt payments, he can cancel debt
U.S. Solicitor General Elizabeth Prelogar pushed back against the plaintiffs’ claims that Biden abused his power granted in the Heroes Act, likening the cancelation of student loan debt to postponing loan repayments, which was allowed under the same law.
“This is how secretaries across administrations have implemented the Heroes Act,” Prelogar said.
She argued that to suggest Biden’s forgiveness of student loan debt “creates a brand-new program,” as argued by Nebraska and other states that sued the Biden administration, would “leave very little room for the Heroes Act to operate at all.”
Prelogar added: “The fact that there are already statutory provisions for things like deferment and forbearance and discharge demonstrates that Congress could foresee that all of those are ways that you grant financial relief to student loan borrowers.”
– Joey Garrison
Many borrowers will still owe even if Biden plan allowed to go forward
Nebraska Solicitor General James Campbell stated that 20 million borrowers would be left without student loan balances if the debt forgiveness were approved. That matches figures the Biden administration has shared previously.
However, many borrowers would still have at least $20,000 in student loan debt if Biden’s plan were allowed to stand – even if they received the full $20,000 of relief. According to data from the Education Department, roughly 11.7 million borrowers owe more than $40,000.
– Chris Quintana
Amy Coney Barrett, liberal justices piling on over standing
Associate Justice Amy Coney Barrett is one of the first conservatives in this section of the argument to wade into whether the states have standing to sue.
The states argue, in part, that a state-created entity known as MOHELA that services student loans would lose revenue under the plan. But MOHELA, a quasi-state agency in Missouri, didn’t actually bring the lawsuit. Missouri did.
A key question for the court is whether Missouri can sue on behalf of MOHELA.
Barrett, a Trump nominee who has twice before dismissed emergency cases the challenging loan plan, pressed the states on the point.
“Do you want to address why MOHELA’s not here?” Barrett asked. “If MOHELA is an arm of the state, why didn’t you just strong arm MOHELA” and tell them to pursue the case?
Campbell, who is representing the states, said that is “a question of state politics.”
Barrett’s comments came after the court’s liberal wing also pressed hard on whether the six conservative states that have sued over Biden’s student loan forgiveness program have standing to sue. If the court decides the states were not actually harmed by the plan, then Biden could win the case on a procedural point.
– John Fritze
Next up in SCOTUS oral arguments: Nebraska’s James Campbell
More than an hour into the Supreme Court’s oral arguments over Biden’s student loan forgiveness plan, the states who are suing over the $400 billion proposal now get their say.
The states are being represented by Nebraska Solicitor General James Campbell.
Campbell is likely to face a series of difficult questions from the court’s liberal wing – and perhaps some of its conservatives as well – over whether the plaintiffs in the cases were actually harmed by Biden’s plan. If the answer to the question is “no” for all the plaintiffs, Biden would eek out a narrow win.
A key signal to watch in this portion of the argument: How much the court’s conservatives jump into the fray over standing.
“The secretary is attempting to bypass Congress on one of today’s most debated policy questions,” Campbell told the court.
– John Fritze
What is the major questions doctrine?
Conservative legal thinkers have been pushing for years to curb the “administrative state,” arguing that federal agencies should have less power to act unless there’s clear congressional approval. The Supreme Court has been bolstering that effort by relying on something called the “major questions doctrine” to decide high-profile cases.
Under that doctrine, courts can invalidate regulations that have a major effect on the economy, are a matter of great “political significance” and are not explicitly authorized in the law – though no one is entirely sure how to define those terms. The Biden administration says the doctrine doesn’t even apply in the student loan case because the law, they say, is clear on its own. The plaintiffs disagree.
The same doctrine was used in 2021 to prevent Biden from extending an eviction moratorium tied to the COVID-19 pandemic. The Supreme Court struck down the moratorium, ruling Congress couldn’t have contemplated the law leading to a halt of evictions.
– John Fritze
More:Biden’s ability to bypass Congress, starting with student debt relief, faces ‘major’ legal hurdle
Brett Kavanaugh: Student loan forgiveness program ‘seems problematic’ under precedent
Associate Justice Brett Kavanaugh, speaking for the first time during the Supreme Court oral arguments, pressed the Biden administration on why the student loan program shouldn’t suffer the same fate as other executive actions the court has struck down.
Congress, Kavanaugh said, “could have…referred to loan cancellation” in the law, but it didn’t. Instead, Kavanaugh said, the administration relied on “general language” in an “old statute” to create a “massive new program.”
“That seems problematic,” under Supreme Court precedent, Kavanaugh said. “Why does this case not fit into that formula that we’ve seen before?”
Long considered at the center of the court – and occasionally a gettable vote for the court’s liberal wing – Kavanaugh is always an important justice to watch in the arguments. He can also be sometimes hard to read, asking tough questions of both sides.
– John Fritze
What is the HEROES Act?
Many of the justices are probing the power associated with the HEROES Act of 2003. The statute was enacted after 9/11. That law, the administration argues, gives the education secretary the ability to “waive” or “modify” student loans during a national emergency. That, in turn, would give the administration the ability to discharge debt en masse due to the pandemic.
The states argue the law does not give the secretary the ability to erase debt.
The HEROES Act has also been used as the justification for the ongoing pause on federal student loan payments. Those obligations were first paused in March 2020 under former President Donald Trump’s administration at the onset of the pandemic. Both administrations extended the moratorium – which included setting interest rates on federal student loans at zero percent – multiple times. That pause could last through August depending on when the court issues its opinion deciding the two cases challenging the debt forgiveness plan.
– Chris Quintana
John Roberts drills Biden administration over separation of powers
In a troubling sign for the prospects of Biden’s student loan program, Chief Justice John Roberts smacked down the central premise of the administration’s legal argument: that the president had the authority to act unilaterally to wipe out student loan debt without Congress.
“We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Roberts said.
Roberts said the student loan case reminded him of a case in 2020 in which the Supreme Court, in a 5-4 decision, blocked unilateral action by former President Donald Trump to dismantle the Obama-era DREAMers program for undocumented immigrants.
“This is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that significance,” he said.
– Joey Garrison
How much federal student loan debt is there?
According to the Education Department’s most recent figures from the fourth quarter of 2022, there are 43.5 million federal student loan borrowers who hold about $1.63 trillion in debt. That figure has steadily grown in recent years, and is more than double the $516 billion owed by 28.3 million borrowers in 2007.
The Biden administration has estimated that roughly 40 million borrowers are eligible for itsmass forgiveness program.
– Chris Quintana
Freshman year, and already deep in debt
Antwan McPherson and Justice Stanton, both 19, came to Washington from North Carolina for the day to rally for student debt forgiveness – even though it won’t apply to them.
The two students at North Carolina A&T are still freshmen and have already accumulated thousands in debt. “I’ve come to understand early how much debt I’ll have if I continue on,” said McPherson, who’s from Chicago and chose to attend the North Carolina school because it was a relatively inexpensive Historically Black College and University (HBCU).
Even if he gets a minimum wage job after college, he said, he wouldn’t be able to pay off what he owes. “Say you make a certain amount in a year, you really don’t make that amount because you’re paying it back,” he said. “So you work hard just to pay it back.”
McPherson said he’s “not too optimistic” about the prospects of Biden’s debt cancellation plan given the conservative leanings of the high court.
Stanton, however, is more hopeful “that our efforts aren’t going to waste.”
“I don’t think it’s fair that as students, most of us being so young, that we have such a burden of paying all these debts and we barely have our lives figured out,” Stanton said.
Debt “could limit me in terms of whether I want a house in the future, my career, if I wanted to open a business,” Stanton continued. “It all would be way harder if I have to pay back money just for an education that should be free.”
– Alia Wong
What is MOHELA?
The Justices have gone back and forth over the role of the Higher Education Loan Authority of the State of Missouri, or, as it’s better known, MOHELA. It’s a quasi-state agency in Missouri that services federal loans nationally.
The Justices asked if MOHELA suffering financial losses as a result of the debt forgiveness program would be enough for Missouri to bring a case against the federal government. MOHELA has previously stated it did not have a role in Missouri’s litigation.
MOHELA is also the servicer that manages the federal government’s Public Service Loan Forgiveness Program, an initiative meant to erase the debt of those working in the public sector.
– Chris Quintana
Elizabeth Prelogar: Who is the Biden administration’s attorney?
The Biden administration is being represented by U.S. Solicitor General Elizabeth Prelogar, who has been serving in the position since 2021.
Sometimes referred to as the “10th justice,” the solicitor general leads a team of lawyers who argue before the Supreme Court on behalf of the federal government and decide whether to appeal lower court rulings when the government is a party to a lawsuit.
Prelogar, a former Fulbright fellow and Harvard Law School graduate, clerked for Attorney General Merrick Garland, then a judge on the U.S. Court of Appeals for the District of Columbia Circuit. She also clerked for two Supreme Court associate justices, Ruth Bader Ginsburg and Elena Kagan.
– John Fritze
More:Senate confirms Elizabeth Prelogar as government’s top Supreme Court lawyer
Early questions from conservatives signal opposition to Biden
Three members of the Supreme Court’s conservative wing – Chief Justice John Roberts, and Associate Justices Clarence Thomas and Samuel Alito – have focused heavily on whether the Biden administration had the authority to execute its student loan forgiveness plan.
It’s very early in the arguments – a lot can shift over the course of the next several hours – but it’s not a great sign for Biden that there’s so much focus on the merits of the case rather than a debate about whether the correct plaintiffs filed suit in the case.
Alito zeroed in on an argument Biden has been making: That the court’s difficult-to-meet standard for when a president can act alone shouldn’t apply. The administration had asserted that the standard had previously been used to assess regulations, not benefit programs.
“Drawing a distinction between benefits programs and other programs seems to presume that when it comes to the administration of benefits programs, a trillion dollars here, trillion dollars there, doesn’t really make that much difference to Congress,” Alito said.
– John Fritze
Justices question ‘half a trillion’ cost of Biden’s actions
Justices pressed the Biden administration’s lawyer on the projected $400 billion cost of Biden’s action to forgive student loan debt, suggesting such a move goes beyond the 2003 Heroes Act that allows the president to “waive or modify” loan provisions.
“Congress shouldn’t have been surprised when half a trillion dollars is wiped off the books?” Chief Justice John Roberts said.
Associate Justice Sonia Sotomayor, one of the three liberal justices, echoed Roberts’ questioning: “How do you deal with? That seems to favor the argument that this a major challenge,” Sotomayor said.
U.S. Solicitor General Elizabeth Prelogar said canceling student loan debt is not based on regulatory authority but “the administration of a benefits program.”
“It’s perfectly logical for Congress to broadly empower the executive to provide benefits, especially in a crisis situation or an emergency like we’ve seen with COVID-19,” she said.
– Joey Garrison
Clarence Thomas, John Roberts use first questions to question Biden’s power
Associate Justice Clarence Thomas started off the arguments Tuesday questioning under what authority the administration seeks to cancel student loans. The law Biden relied on gives the administration power to “waive or modify” loan provisions.
Is what Biden did a “waiver or a modification,” Thomas pressed. There’s no explicit provision in the law that allows the loans to be “cancelled,” Thomas pointed out.
Chief Justice John Roberts picked up that same argument.
“We’re talking about half a trillion dollars and 43 million Americans,” Roberts said. “How does that fit under the normal definition of modify?”
– John Fritze
Supreme Court arguments underway in Biden student loan forgiveness plan
The Supreme Court’s arguments over President Joe Biden’s student loan program got underway a little after 10:10 a.m. ES.T Representing the Biden administration, and starting off the arguments, is Solicitor General Elizabeth Prelogar.
Prelogar told the court that without the plan, “defaults and delinquencies will surge.” Congress “expressly authorized” the loan forgiveness during emergencies, she said.
– John Fritze
Ketani Brown Jackson hands down first merits opinion
Associate Justice Ketanji Brown Jackson handed down her first merits opinion Tuesday in a battle between states over who gets the proceeds of abandoned money orders.
Jackson wrote for a unanimous court that as a general matter the proceeds should go to the state where the product was purchased. By tradition, the court tries to assign the least senior justice an opinion that is unanimous.
– John Fritze
Hundreds gather outside Supreme Court for student loan forgiveness debate
Hundreds of protesters gathered outside the Supreme Court on Tuesday ahead of the arguments about Biden’s student loan forgiveness program – most of whom appeared to support the plan.
Some carried signs that read “Cancel Student Debt.” Others proclaimed that “Student debt cancellation is illegal.” They chanted phrases throughout, such as “D-E-B-T, student debt is crushing me!” and “Education is a right!”
The turnout appeared to be the largest since the high court held arguments last year in the blockbuster affirmative action cases.
Eliana Reed, 26, said efforts to preserve Biden’s debt relief program are a “no brainer.” That millions of Americans are subject to insurmountable debt they’re unable to pay off with their jobs “feels so obviously wrong,” said Reed, who has about $17,000 in student debt left.
The issue “taps into so many different groups of people.”
– John Fritze and Alia Wong
Supreme Court denied student loan challenges before
Before the Supreme Court scheduled arguments in Tuesday’s student loan cases, it had twice before balked at lawsuits challenging the program.
Associate Justice Amy Coney Barrett in November denied a challenge to the loan forgiveness program from a conservative legal group on behalf of two people entitled to “automatic” cancellation of their debt. The plaintiffs claimed that the automatic cancellation would create “excess tax liability under state law.”
A month earlier, the court batted away a lawsuit from a Wisconsin taxpayer group.
The reason there are so many lawsuits is that groups opposed to the program have been attempting to find a plaintiff who has standing – in other words, who can demonstrate they are injured by the effort in a way that allows them to challenge it in federal court.
Whether the current plaintiffs have standing will be a central part of the argument Tuesday as well.
– John Fritze
More:Biden will be playing defense on student loans at the Supreme Court. Here’s why.
Biden: ‘I have your back’ on student loans
Biden addressed the student loan litigation briefly during remarks Monday night.
“My administration is making our case to the Supreme Court, and I’m confident the legal authority to carry out that plan is there,” the president said at a White House ceremony celebrating Black History Month. “I promise you. I have your back.”
– Joey Garrison
Plaintiffs: ‘There is a student loan crisis’
The plaintiffs challenging Biden’s student loan forgiveness plan acknowledge that the current student loan system isn’t working. They just don’t think Biden’s plan will fix it.
“There is a student loan crisis in this country,” Karen Harned, chief legal officer for the Job Creators Network Foundation, said on a call with reporters Monday. “But this crisis cannot and will not be solved by the president creating a $400 billion program behind closed doors without any input from Congress or the American people.”
Questions:Is Biden’s student debt forgiveness plan dead?
Rough ride ahead:Biden will be playing defense on student loans at Supreme Court
The group is representing two borrowers: One who didn’t qualify for forgiveness because her loans are held by a private, commercial entity and another who didn’t qualify for the maximum possible relief because he wasn’t a Pell Grant recipient.
Biden’s proposal would wipe away $20,000 worth of debt for borrowers who also used a Pell Grant to pay tuition. Pell Grants are awarded to students from low-income families. He also wants to erase $10,000 in debt for most other borrowers.
– John Fritze
Plan B on student loan forgiveness? White House won’t say.
With many experts predicting President Joe Biden is in for a rough argument Tuesday over his $400 billion student loan forgiveness plan, a natural question has come up repeatedly in recent days: Is there a Plan B if the administration’s effort is ultimately struck down?
Give points to White House press secretary Karine Jean-Pierre for answering the question consistently: “We are very much confident in our legal authority here,” Jean-Pierre told reporters Monday – echoing the answer she gave to the same question Friday. “That’s why our Justice Department has taken it all the way to the Supreme Court.”
Translation: If there is a backup plan, the administration isn’t ready to talk about it. That’s not a surprise, though. A major element of the litigation is whether the administration used the right law to set up the loan forgiveness program. Acknowledging the administration is combing through federal statutes looking for some other way to authorize the program would give ammunition to the plaintiffs on the eve of the arguments.
– John Fritze and Joey Garrison
Justice Thomas wrote of ‘crushing weight’ of student loans
The Supreme Court won’t have far to look if it wants a personal take on the “crushing weight” of student debt that underlies the Biden administration’s college loan forgiveness plan. Associate Justice Clarence Thomas was in his mid-40s and in his third year on the nation’s highest court when he paid off the last of his debt from his time at Yale Law School.
Thomas, the court’s longest-serving justice and staunchest conservative, has been skeptical of other Biden administration initiatives. And when the Supreme Court hears arguments Tuesday involving President Joe Biden’s debt relief plan that would wipe away up to $20,000 in outstanding student loans, Thomas is not likely to be a vote in the administration’s favor.
What to know:Everything to know about student loan forgiveness plan
Plan B:Millions of borrowers have had billions in student loan debt erased, and there’s more to come.
But the justices’ own experiences can be relevant to how they approach a case, and alone among them, Thomas has written about the role student loans played in his financial struggles.
A fellow law school student even suggested Thomas declare bankruptcy after graduating “to get out from under the crushing weight of all my student loans,” the justice wrote in his best-selling 2007 memoir, “My Grandfather’s Son.” He rejected the idea.
– Associated Press
What’s in Biden’s student loan forgiveness plan?
Biden proposed wiping away $20,000 worth of debt for borrowers who also used a Pell Grant to pay tuition. Pell Grants are awarded to students from low-income families. The president also wants to erase $10,000 in debt for most other borrowers.
Only borrowers with an income less than $125,000, or $250,000 for married couples, would be able to have any debt forgiven.
About 26 million people applied for relief before lawsuits stopped the entire program in its tracks. And of those, 16 million were approved to have a portion, or depending on their balance, all their debt erased. For now, applications are closed.
– Nirvi Shah and Chris Quintana
Blueprint:Find more about options from savings plans to student loans
