July 5, 2023
Biden v. Nebraska, No. 22-506, 600 U.S. ___, 2023 WL 4277210 (June 30, 2023) (Roberts, C.J.)
Response by Richard J. Pierce, Jr.
Geo. Wash. L. Rev. On the Docket (Oct. Term 2022)
Slip Opinion | SCOTUSblog
Biden v. Nebraska: The President Cannot Cancel Student Loans
The opinion of the six-Justice majority in Biden v. Nebraska1 will disappoint millions of people who hoped to have their student loans cancelled or dramatically reduced. The majority held that President Biden and the Secretary of Education lack the authority to cancel student loan debts.2 That result is not surprising, but the reasoning in the majority opinion illustrates the eagerness of the majority to play the decisive role in resolving all major policy disputes.
On August 24, 2022, President Biden announced that he was directing the Secretary of Education to cancel up to $20,000 in student loan debt for recipients of Pell Grants and up to $10,000 in student loan debt for non-Pell Grant recipients subject to an income limit of $125,000 for individuals and $250,000 for households.3 He relied on the Higher Education Relief Opportunities for Students Act (“HEROES Act”)4 as authority to take that action.5
The HEROES Act authorizes the Secretary of Education to “waive or modify any statutory or regulatory provision applicable to the student assistance programs” that authorized the loans “as the Secretary deems necessary in connection with a war or other military operation or national emergency . . . .”6 Beginning in March 2020, Secretaries of Education repeatedly relied on that provision, combined with the presidential declaration of a national emergency caused by the COVID-19 pandemic, to pause temporarily the accrual of interest and repayment obligations on all federal student loans.7 For part of the period in which the Secretaries ordered the pause, Congress ratified the pause and directed the Secretary to continue it.8
Before President Biden directed the Secretary to cancel some of the debts, the General Counsel of the Department of Education wrote an opinion letter explaining why the Department lacked the authority to cancel student loan debts.9 Speaker of the House Nancy Pelosi agreed with the General Counsel.10 Democrats in the House and Senate attempted to enact a statute that would cancel some student loan debts but those efforts failed.11
The majority’s decision that the President’s order was unlawful could have been based entirely on the language of the HEROES Act. It authorizes the Secretary to “modify or waive” the terms of a student loan, or a class of student loans, in response to a presidential declaration of a national emergency.12 The prior actions of the Secretaries in pausing temporarily the accrual of interest and repayment obligations during the COVID-19 pandemic fit comfortably within that grant of authority.13 The permanent cancellation of a significant portion of the debt does not fit comfortably within the meaning of the term “modify or waive,” however—particularly when the national emergency that the Secretary relies on as the basis for the permanent cancellation is temporary. President Biden has declared that the COVID-19 national emergency ended on May 11.14 The majority devoted several pages of its opinion to entirely defensible reasoning of that type in support of its conclusion that the Secretary lacked the authority to cancel the loans.15
The majority could have stopped there. It chose instead to engage in an entirely unnecessary application of the major questions doctrine. The majority declared that the action qualified for application of the major questions doctrine because of its “staggering” economic and political significance.16
When the conservative majority invokes the major question doctrine, it refuses to uphold an exercise of government power unless the government can identify a statute that clearly and explicitly authorizes the disputed action—a test of validity that would have been fatal to a high proportion of the agency actions that the Supreme Court has upheld over the past century. Justice Barrett then gilded the lily by authoring a long opinion in which she attempted to explain the major questions doctrine, defend it against the criticisms of the many scholars who have questioned its legitimacy, and explained why the majority applied it in this case.17
The majority’s gratuitous invocation of the major questions doctrine can only be viewed as a shot across the bow of the administration and an invitation to lower courts to invoke the doctrine any time any agency takes an action that has economic or political significance. The majority opinion will have the obviously intended effect of causing agencies to be reluctant to take any major action.
The majority’s reasoning in support of its conclusion that a petitioner had standing to obtain review of the Secretary’s action also illustrates the eagerness of the majority to play the decisive role in resolving all significant policy disputes. The petitioners consisted of states that were not injured by the decision in any way that would qualify them for standing under the Court’s precedents.18 None of them could demonstrate that they would suffer any “concrete injury” caused by the action.19 Their arguments on the merits consisted entirely of the kinds of purely ideological objections to a government action that the Court has repeatedly characterized as “generalized grievances” that cannot support a claim to have standing to obtain review of an agency action.20
The majority used unusual reasoning to support its holding on standing. It held that the state of Missouri had standing because of a corporation called the Missouri Higher Education Loan Authority (“MOHELA”).21 The Missouri legislature created MOHELA as a government corporation.22 MOHELA services student loans to Missouri citizens.23 The Secretary’s action would have caused it to suffer a “concrete injury” in the form of lost revenues.24 MOHELA declined to file a petition for review of the Secretary’s action, however, even though it clearly had the power to do so.25 Moreover, there was no evidence that MOHELA’s losses caused by the Secretary’s action would be passed on to the state.26 It is hard to see how MOHELA’s concrete injury can be attributed to Missouri for standing purposes. Yet, that is what the majority did.
I was not surprised by the majority’s holding on standing. Scholars have long been divided into two schools of thought with respect to the law of standing. Some believe that the Court first gives serious consideration to standing and only addresses the merits of a dispute if it first concludes that a petitioner has standing.27 Others believe that the Justices first decide whether they want to address the merits of a dispute.28 They then decide that a petitioner has standing if they want to address the merits and that the petitioner does not have standing if they do not want to decide the merits. As I have explained, I have long been a member of the second group.29
I am co-author of a treatise in which we devote 210 pages to an effort to describe and explain the law of standing.30 I am confident that our description of the Court’s opinions is accurate, but our attempt to explain the massive, inconsistent, and muddled body of Supreme Court opinions on standing falls well short of our goal of describing a coherent and principled body of law. In this case, I knew that the majority wanted to hold that the decision to cancel the student debt was unlawful, so I was confident that the majority would find some way of holding that a petitioner had standing to obtain review of the decision.
The reasoning of the conservative majority in this case will have its desired effects of deterring agencies from taking any major action and will increase the intensity of the political controversy about the dominant role that the conservative majority of the Court is taking in resolving political disputes.
Professor Richard J. Pierce, Jr. is the author of over twenty books and 130 articles on administrative law, government regulation, and the effects of various forms of government intervention on the performance of markets. His books and articles have been cited in hundreds of judicial opinions, including over a dozen opinions of the U.S. Supreme Court.
Recommended Citation
Richard J. Pierce, Jr., Response, Biden v. Nebraska, Geo. Wash. L. Rev. On the Docket (July 3, 2023), https://www.gwlr.org/students-for-fair-admissions-affirmative-action.
