On March 1, 2023, Mark Chenoweth, the President and General Counsel of the New Civil Liberties Alliance, recapped the Supreme Court’s recent oral arguments in Biden v. Nebraska and Department of Education v. Brown—two challenges to the Biden Administration’s forgiving of student loans pursuant to the HEROES Act.
Chenoweth allotted most of his time to Biden v. Nebraska, where the argument revolved around two questions: (1) whether the State of Missouri had standing to challenge the program, and (2) whether the Secretary of Education exceeded his statutory authority in forgiving student loans.
On the standing question, Chenoweth recounted how some Justices, most notably Justice Kagan, questioned whether the state had standing given that the alleged financial injury in the case was sustained by a third party, MOHELA (Missouri Higher Education Loan Authority), a loan servicer incorporated by the state. Justice Kagan contended that Article III’s “case or controversy” requirement normally precludes third-party standing. Indeed, United States Solicitor General Elizabeth Prelogar stressed a similar point—that MOHELA is a separate legal entity that ought to assert its own interests in court. Nebraska Solicitor General James Campbell responded by invoking precedents like Cherry Cotton Mills, wherein the Court allowed the federal government to assert the interests of a federally created entity. The upshot of General Campbell’s argument, said Chenoweth, is that the Court should allow states to do the same vis-à-vis state-created entities.
As for the merits question, Chenoweth recounted how much of the argument centered on the Major Questions Doctrine. Given the Court’s recent holding in West Virginia v. EPA, the Major Questions Doctrine is set to be a major factor in cases regarding agencies’ alleged statutory authority to decide questions of vast economic and political significance. Here, the Secretary of Education’s loan forgiveness program was premised on the HEROES Act, which empowers the Secretary to “waive or modify” loans in the event of emergencies.
Chenoweth first summarized General Prelogar’s arguments on the merits. General Prelogar argued that loan forgiveness is a standard form of debt relief, and that the language of “waive or modify” is capacious enough to encompass the Administration’s loan forgiveness program. Moreover, General Prelogar contended that this case falls outside the scope of the Major Questions Doctrine since it is a benefits program, as opposed to a program that regulates and restricts citizens’ liberty and property.
Various Justices posed a number of skeptical questions to General Prelogar. Chenoweth noted that Justice Thomas pointed out that Congress uses the express language of loan cancellation in other statutory provisions, but it did not do so here. Justice Kavanaugh raised a similar point. And the Chief Justice repeatedly returned to the Major Questions Doctrine. For example, the Chief pointed to the precedent of MCI Telecomm. v. AT&T, authored by Justice Scalia, that stressed the limited nature of the verb “modify”—a word that connotes minor change, not wholesale rewriting of a program.
Chenoweth also recounted how the Justices pushed back on General Prelogar’s attempt to draw a benefits-versus-regulation distinction to avoid the application of the Major Questions Doctrine. Justice Alito argued that the Major Questions Doctrine preserves separation of powers values, and that those values are implicated in benefits programs that cost hundreds of millions of dollars no less than they are implicated in the regulatory context. Similarly, Chenoweth noted that General Campbell repeatedly stressed that student loan forgiveness is a decision for Congress to make, not the Secretary of Education.
Chenoweth predicted that the Court will rule that there is in fact state standing in Biden v. Nebraska, and that the Biden Administration’s loan forgiveness program will not be able to withstand the force of the Major Questions Doctrine. Meanwhile, he said, the complaint in Department of Education v. Brown very well might not clear the hurdle of Article III standing.
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