Don’t Touch My Debt!: Analyzing the Legality of Biden’s Student Loan Plan
In response to the economic hardship posed by the COVID-19 pandemic, the United States Department of Education paused payments of federal student loans and set the interest rate to 0 percent for the foreseeable future [1]. However, beginning September 1, 2023, payments resumed, forcing borrowers to begin paying again during October of 2023. Thinking ahead, President Joe Biden instituted a federal student loan forgiveness plan through which borrowers could receive up to $20,000 in student loan debt relief, wiping out almost $400 million in student loan debt across the nation [2]. With over 45 million Americans currently in student loan debt totalling $1.6 trillion, it is understandable that Biden wants to help his constituents by canceling their debts [3]. Nevertheless, shortly after issuing this student loan forgiveness via executive order, six states sued Biden over this overstep by the executive branch.
Eventually, Biden vs. Nebraska reached the Supreme Court questioning whether the executive branch had the power to cancel these debts. The Court ruled that Biden had overreached his authority as president, setting back the Biden administration and its push to relieve student loans [4]. While student loan forgiveness may sound like a good policy, Biden’s plan is surely not the best solution as it misinterpreted the written law and over-utilized executive power. While good-intentioned, Joe Biden’s overly generous student debt relief plan was correctly struck down by the Supreme Court. Through analyzing the majority, concurring, as well as the dissenting opinions, it is clear that a new, congressionally sanctioned plan must be brought forth by the Biden administration to curb student loan debt.
As outlined in the majority opinion, President Biden’s student loan plan acts completely outside the Higher Education Relief Opportunities for Students Act (HEROES Act), overstepping his executive authority. The HEROES Act states that the President “may waive or modify any statutory or regulatory provision applicable to the loan programs as the Secretary deems necessary in connection with a war or other military operation or national emergency.”[5] Using the definitions stated in the act, President Biden argued that the HEROES Act gave him the authority to cancel $430 billion of student loan principal from Americans. Using specifically the words of “waive and modify,” Biden’s counsel argued that since COVID-19 was a “national emergency” that the relief was, in fact, legal and should be administered. Nevertheless, Nebraska and five other states argued that Biden’s plan was not simply a modification, but a complete overhaul of the student loan plan as written by Congress. In a 6-3 decision split along partisan lines, the Supreme Court ruled in favor of the plaintiff that this student loan plan was an abuse of executive power [6]. Chief Justice John Roberts, writing for the majority, wrote that the “The [President’s] new ‘modifications’ of these provisions were not ‘moderate’ or ‘minor.’ Instead, they created a novel and fundamentally different loan forgiveness program.”[7] The HEROES Act was intended for emergencies such as COVID-19, when student loan payments were stopped because of the intensifying pandemic. The bill writers expected the use of the Act only in times where borrowers could absolutely not pay their debts. However, it was not made for a president to cancel nearly half-a-million dollars of debt simply because it would make his constituents better off. President Biden did not simply want to make a small modification to the interest rate or even to the timeline of student loan payback, but instead called for a complete overhaul of the system, completely overstepping the congressional intentions of the HEROES Act.
Further, as stated by the majority opinion, the Biden plan’s considerable scope would allow incredible executive control over the economy, setting a bad precedent. As already mentioned, President Biden’s plan would have forgiven approximately $430 billion dollars of student loans from Americans. Through examining the majority opinion, the extent to which President Biden overstepped his authority becomes clear. Justice Roberts continued to explain that the plan amounted “to nearly one-third of the Government’s $1.7 trillion in annual discretionary spending” which is “staggering by any measure.”[8] If this plan had been implemented, for future executive orders, a President would have much more control of the American economy than originally intended. The idea that a single individual could control nearly a third of the government’s discretionary spending is out of the historical norm and could cause a dangerous precedent for future presidents. With this large amount of control over the economy, impacts such as the one calculated by the National Taxpayer Union could have been brought to light in regards to Biden’s student loan plans. Under Biden’s student loan plan, their model predicts that “the average burden per taxpayer in the U.S. is $2,503.22.”[9] A government that operates with one person single-handedly controlling one-third of discretionary spending is a government without democratic accountability, thus, the judiciary made the correct decision to strike down the student loan forgiveness plans.
One final point discussed by the majority, concurring, and dissent opinions is the idea of the ‘major questions’ doctrine, but even as the dissent offers rebuttals to the majority opinion, the concurring opinion clearly establishes the plan’s defiance of the doctrine. The major questions doctrine explains that “Congress [must] speak clearly if it wishes to delegate decisions of great political or economic significance to an administrative agency.”[10] The major questions doctrine is brought up in the majority, concurring, and dissent opinions — Justice Roberts discussed the idea of how modifying and waiving was under the executive branch’s authority, but as Congress didn’t agree to a complete overhaul to the Act, it is not under the President’s purview to implement his drastic plan. However, the dissent refutes this point.
The dissent, written by Justice Elena Kagan, explained that “the Secretary responsible for carrying out the student-loan programs forgave student loans in a national emergency under the core provision of a recently enacted statute empowering him to provide student-loan relief in national emergencies.”[11] Kagan is essentially critiquing the majority opinion through explaining that the HEROES Act is a law that Congress had already passed, and since the language in the bill puts no stipulations on the types of modifications that the executive branch can enact, that the major questions doctrine actually supports President Biden, rather than goes against him. This idea that as the HEROES Act, in all technicality, gives the President the power to control all things student-loan related is not wrong, and can be, and has been, interpreted in such a way. However, the concurring opinion all but foresees Kagan’s argument, as Justice Amy Coney Barrett offers a rebuttal in regards to the major questions doctrine. In her concurrence, Justice Barrett discusses the idea of “common sense” as it relates to the doctrine, saying how important context is in interpreting a law [12]. Justice Barrett refutes Justice Kagan’s points by further explaining how “clarity may come from specific words in the statute, but context can also do the trick.”[13] While it may not be explicitly stated the exact bounds of power the executive branch has over student loan payments, the context surrounding the HEROES Act was simply for cases of extreme emergency, similar to the COVID-19 pandemic, not simply because some Americans are struggling with their debt after the emergency period has ended. The law is not bound to words on a page but can be taken with historical and political events in mind. As such, the context of the HEROES Act illustrates that the Congress assembled did not intend for the Act to be used in the way that President Biden has enacted.
Through analyzing the majority, concurring, and dissenting opinions, it is clear that the Supreme Court was correct in striking down President Biden’s student loan plans, regardless of the intent behind the policy. While the HEROES Act covers executive authority on the basis of “waiving or modifying,” it does not count for the complete overhaul of $430 billion that President Biden had requested in his executive order [14]. Judicial acceptance of this extensive of a plan would have set a precedent in which the executive branch is able to control a large portion of the economy, as canceling the debt of millions of Americans’ student loans would have done. And finally, even though the dissent offers a rebuttal to the idea of executive privilege, the context surrounding the HEROES Act shows that the Act was never intended to wipe out student loan debt, but just for use in case of emergency.
Looking to the future, an alternate plan that does not overly rely on executive authority is best to provide relief to millions of Americans. People deserve to have their student loans forgiven and to not be burdened with debt until their death. People deserve financial freedom in this country. But this reality can only be possible if Congress works together to pass legislation that clearly intends for student debt reform; whether a Congress cohesive enough to pass such a thing could exist in today's political climate is something only the future can tell.
Bibliography
“Payment Pause and 0% Interest,” Federal Student Aid, September 2023, https://studentaid.gov/announcements-events/covid-19/.
Adam Liptak, “Student Loan Forgiveness: Supreme Court Rules 6-3 against Biden Plan,” The New York Times, July 2, 2023, https://www.nytimes.com/live/2023/06/30/us/student-loans-supreme-court-biden#student-loan-forgiveness-supreme-court-biden.
Liptak, “Student Loan Forgiveness: Supreme Court Rules 6-3 against Biden Plan.”
Biden v. Nebraska, 600 U. S. ___ (2023)
Congress.gov. "Text - H.R.1412 - 108th Congress (2003-2004): Higher Education Relief Opportunities for Students Act of 2003." August 18, 2003. https://www.congress.gov/bill/108th-congress/house-bill/1412/text.
Biden v. Nebraska, 600 U. S. ___ (2023).
Ibid.
Biden v. Nebraska, 600 U. S. ___ (2023).
Andrew Lautz, “Latest: Biden Student Debt Cancelation Could Cost Taxpayers around $400 Billion,” National Taxpayers Union, August 25, 2022, https://www.ntu.org/foundation/detail/latest-biden-student-debt-cancelation-could-cost-taxpayers-around-400-billion
Thomas Griffith, “Deference, Delegation, and Divination: Justice Breyer and the Future of the Major Questions Doctrine,” The Yale Law Journal, November 21, 2022, https://www.yalelawjournal.org/forum/deference-delegation-and-divination.
Biden v. Nebraska, 600 U. S. ___ (2023).
Biden v. Nebraska, 600 U. S. ___ (2023).
Ibid.
Ibid.