Biden Student Loan Forgiveness Plan in Trouble at Supreme Court, Lawyers Say

Pacific Legal Foundation attorney Caleb Kruckenberg (courtesy Pacific Legal Foundation)

President Joe Biden’s sweeping plan to partially forgive student loans will likely receive a cool reception when the Supreme Court hears challenges to the program on Feb. 28, legal experts told The Epoch Times.

Biden introduced the plan in August 2022 in a move that critics decried as a constitutionally dubious attempt to shore up Democrats’ fortunes ahead of the November 2022 congressional elections. While the Congressional Budget Office said the plan could cost about $400 billion, the Wharton School at the University of Pennsylvania estimates the price tag could exceed $1 trillion.

The student loan relief program is premised on the existence of the emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus. The national emergency and the public health emergency enabled federal agencies to exercise expansive powers in managing the government’s pandemic response.

In a move that could undermine the government’s legal arguments in the pending court cases, Biden’s Office of Management and Budget said in a Jan. 30 press release (pdf) that it would extend the soon-to-expire emergencies to May 11 “and then end both emergencies on that date.”

The federal government put a pause on student loan payments and interest during the recent pandemic but then claimed in 2022 that the pandemic gave it emergency authority under the law to proceed with partial loan forgiveness. Republicans, who took the majority in the House of Representatives in January, say the emergencies aren’t justified and should be ended sooner.

About 26 million people reportedly applied under the program before courts blocked it last year. Of those 26 million, 16 million were said to have been approved before the government stopped accepting applications.

The Department of Education claims that it has the authority to move forward with the debt relief proposal, which would cancel as much as $20,000 in loan principal for 40 million borrowers, under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act).

But lawmakers involved in the passage of the HEROES Act say the statute was enacted after the 9/11 terror attacks to provide student loan relief to military service members and their families and was never intended to be used to cancel debts en masse.

The court is scheduled to hear two related cases dealing with the program, Biden v. Nebraska (court file 22-506) and Department of Education v. Brown (court file 22-535), back-to-back on Feb. 28.

The Biden student loan forgiveness plan is flatly unconstitutional, attorney Caleb Kruckenberg of the Pacific Legal Foundation, a national nonprofit public interest law firm, told The Epoch Times.

He said Biden unveiled the debt relief program not long after the pandemic “was over anyway [and] we all sort of understood what that meant.”

Kruckenberg said that even if the Biden administration were successful at the Supreme Court, which he doubts, their stated authority would expire May 11.

He conceded that the announcement that the emergencies will terminate may render the challenges to the program moot, but mootness “is a flexible standard,” he said.

“There is a legal answer, and then there’s a practical answer. And I think the practical answer is, if the court very much wants to reach the case, they will,” he said.

It appears the Department of Education has not “disclaimed” the authority to grant student loan relief, so even if the emergency is over, the court may wonder if there is a chance the department could claim such authority again in the future, he said, adding that department officials will never say they lack the authority.

“They‘ll always insist in any emergency we can do whatever we want,” he said. “And that’s a big enough risk for the Supreme Court to say, ’We’re going to set some rules here.’

“You have to wonder what the administration is doing and ... what they’re planning in the best case scenario for them. Frankly, I was surprised that they asked the Supreme Court for intervention, because a lot of us watching this case expected, and we still expect, if the Supreme Court rules on it, then the administration is going to lose.”

Kruckenberg said that the administration might be thinking politically, reasoning, “‘Well, we’re going to make the Supreme Court overturn this, so that it’s not our fault ... so that we can say we tried, but the court stopped us.’”

“There will probably be two or three dissenters, but I think there’s a very clear majority [that is] going to say, probably not in a complicated opinion, that this is just completely out of bounds.” It will be “a strong rebuke of the department,” he said.

Veteran Supreme Court observer Curt Levey, president of the conservative Committee for Justice, also said he expects the Biden administration to lose.

The court may not even reach the question of how the expiration of the COVID-19-related emergencies affects the validity of student loan relief, Levey told The Epoch Times.

The HEROES Act “was clearly aimed at military personnel,” but it’s not clear whether it allows cancellation of debt, Levey said. The statute allows postponement of debt, which is what his group argued in a friend-of-court brief (pdf), he said.

So the government has overreached by going beyond military personnel and by allowing debt cancellation, he said.

“This has been a court that’s not been afraid to say, ‘Look, the executive branch is overreaching,’ whether it’s the rent moratorium or certain things with immigration, or trying to force private employers to mandate vaccinations,” Levey said.

“They have been willing to say, ‘This is overreach,’ [and] not just defer blindly to whatever the administration says a statute means.”