Right After Biden Successfully Buys Votes With Student Loan Bailout, Supreme Court Will Weigh In

The Supreme Court will decide whether the Biden administration acted lawlessly when it authorized the cancellation of hundreds of billions of dollars in student loans. The high court announced on Thursday that it would expedite an appeal brought by the Biden administration challenging a lower court’s injunction freezing its loan “forgiveness” program, promising a hearing in February on the issues.

Until then, the Supreme Court will let stand the injunction the Eighth Circuit issued in Nebraska v. Biden. That injunction prevents the Biden administration from cancelling student loans of up to $20,000 per borrower, pending resolution of the legal challenge to the debt-forgiveness plan brought by six states: Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. 

In petitioning the Supreme Court for relief, the Biden administration initially sought an order vacating the Eighth Circuit’s injunction, but the administration argued alternatively that, if the high court declined to dissolve the injunction, it should instead hear the case on appeal on an expedited schedule. The Supreme Court’s decision to take the case on appeal presents a unique situation, given that the Eighth Circuit has not yet addressed the merits of the states’ lawsuit. 

Come February then, the Supreme Court will need to decide whether the lower court erred in finding that the states lacked standing to challenge the Biden administration’s cancellation of student loans. The states present an array of arguments for why they had standing, or the legal ability to sue, with Missouri advancing the strongest argument for standing.

Specifically, Missouri maintains loan forgiveness will harm the state because the state, throughout its Missouri Higher Education Loan Authority, or MOHELA, raises funds to support grants and further loans by processing student loans. Fewer student loans to process, because of loan forgiveness, means fewer resources flowing to MOHELA, according to the state, and thus Missouri has standing, they argue. 

If the Supreme Court concludes at least one state has standing to sue, the case can proceed. Then the question will be whether the Biden administration had authority under the HEROES Act to bail out the loans. The HEROES Act is a federal statute Congress passed following the 9/11 attacks that, among other things, authorized the secretary of education to “waive or modify any statutory or regulatory provision applicable to the student assistance programs” when the secretary deems it “necessary in connection with a war or other military operation or national emergency…” 

Because the HEROES Act defines the term “national emergency” to include “a national emergency declared by the President of the United States,” the Biden administration maintained that its secretary of education can “modify” the student assistance programs by cancelling the principle of those loans. The states, as well as other plaintiffs who have challenged the loan-cancellation program, counter that canceling student loans is not a “modification” or “waiver” of a program and that, in any event, Covid did not cause the debtors’ financial difficulties. 

Those challenging the Biden administration’s loan bailout also rely on “the major-questions doctrine,” which teaches that

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