Supreme Court Agrees to Hear Second Case Opposing Biden Administration’s Student Debt Relief Program

The U.S. Supreme Court agreed to hear a second case opposing the Biden administration’s student debt relief program.

In Myra Brown, et al. v U.S. Department of Education et al., plaintiffs argued that the debt relief plan violated the Administrative Procedure Act by not seeking public comment on the plan and harmed two plaintiffs who did not meet the eligibility requirements for debt relief. One plaintiff has student loans that are now privately held and not eligible for forgiveness. The second plaintiff was eligible for just $10,000 in debt forgiveness—not $20,000—because he did not receive a Pell Grant. According to their compliant, “plaintiffs want an opportunity to present their views to the Department and to provide additional comments on any proposal from the Department to forgive student loan debts.” They believe that it is “irrational, arbitrary and unfair” to exclude them from student debt relief plan. The lower court agreed with this argument and further believed that the basis for the program itself was unconstitutional, and thus, the lower court declared the Biden Student Loan Debt Relief Plan unlawful and vacated the program. The U.S. Department of Justice (DOJ) appealed the decision.

Two weeks prior to accepting the Brown case, the Supreme Court Justices agreed to hear Nebraska v. Biden, a case brought by six state Republican Attorneys General. The Attorneys General sought an injunction against the program to prevent it from canceling federal student loan balances. They had a two-pronged argument. First, they argued that the Biden administration overreached its executive authority by canceling student loans under the auspices of the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act), a law created to give the President authority to cancel or modify student loans after natural disasters or national emergencies. The Attorneys General argue that the law was meant to address emergencies, such as terrorist acts, and that the current public health emergency cited by the Biden administration as the basis for the student loan cancelations does not qualify as an emergency under the HEROES Act. Second, MOHELA, Missouri’s student loan servicer that is part of its state government, could see a drop in revenue caused by borrowers consolidating and transferring their federally guaranteed student loans back to the federal government, thereby causing the state harm due to the potential drop in revenue. The Court of Appeals ruled in favor of the Attorneys General. The DOJ appealed the decision.

The U.S. Supreme Court has scheduled hearings on both cases in February 2023. Currently, the Biden administration’s student debt relief plan is put on hold due to the injunctive relief granted by the lower courts. The injunctions will remain in place until the court’s ruling, which is not expected to come until May 2023 or June 2023.