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Supreme Court airs doubts on student loan forgiveness program

Justices hear more than three hours of oral arguments in two cases over the fate of $400 billion in debt

Rep. Judy Chu, D-Calif., speaks at the People's Rally for Student Debt Cancellation outside the Supreme Court on Tuesday.
Rep. Judy Chu, D-Calif., speaks at the People's Rally for Student Debt Cancellation outside the Supreme Court on Tuesday. (Bill Clark/CQ Roll Call)

Conservative justices on the Supreme Court expressed skepticism during oral arguments Tuesday about the Biden administration’s power to forgive student loan debt.

While the Biden administration seeks to revive the forgiveness program, relying on a 2003 law giving the secretary of Education broad powers to alter loan programs in an emergency, the argument ran into criticism from Chief Justice John G. Roberts Jr., and several other justices appointed by Republican presidents.

The program, launched last year, would forgive up to $20,000 for individual borrowers and cost up to $400 billion — amounts that gave several justices pause.

“I think most casual observers would say if you’re going to give up that much amount of money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on,” Roberts said.

During more than three hours of oral argument, the justices touched on issues such as the text of the 2003 law, the flexibility of administrative agencies and when someone has the right to sue the federal government.

The Biden administration had asked the justices to overturn two appellate court decisions that paused the forgiveness program. The U.S. Court of Appeals for the 8th Circuit paused the program after finding a coalition of Republican-led states had the ability to sue.

And a Texas federal judge found the program unconstitutional and ruled it unlawful entirely in a suit from a pair of borrowers who did not qualify for forgiveness.

Solicitor General Elizabeth Prelogar, arguing for the Biden administration, told the justices that the relief would help millions of borrowers impacted by a once-in-a-century coronavirus pandemic.

Prelogar argued the law at issue gave the administration broad authority to “waive or modify” regulations for student loan repayment in case of a national emergency and exempted those actions from the normal rulemaking process.

Justice Brett M. Kavanaugh called it “problematic” that the case is similar to others the court has turned away before, where agencies used “an old statute with kind of general language” to assert new executive authority.

Prelogar responded that the administration used the law exactly as Congress intended, which is to modify the terms of student loans.

“So there’s not the same mismatch here of taking an old statute and dusting it off and deploying it in a context where Congress could never have imagined it would be used before,” Prelogar said.

Nebraska Solicitor General James A. Campbell and the other challengers to the plan argued the statute was never meant to make such broad changes to student loan repayments. Campbell said it would be more appropriate for the government to waive a “consecutive service” requirement for an existing loan discharge program for teachers rather than wholesale forgiveness.

Campbell said allowing the secretary to rewrite student loan terms would “essentially be allowing the executive branch to go in and rewrite statutes after the fact and the executive branch doesn’t have that power.”

Justice Sonia Sotomayor and other justices on the court’s liberal wing said reading the statute that way would effectively change decisions Congress already made by passing such broad language.

“That really has us, as the third branch of government, changing Congress’ words because we don’t think we like what’s happening,” Sotomayor said.

Last year, the Biden administration announced the forgiveness program alongside an end to the pandemic-era pause in student loan repayment. It would provide up to $20,000 in relief to millions of qualified borrowers, at a cost the Congressional Budget Office estimated at more than $400 billion.

The administration said 16 million borrowers had qualified for some form of forgiveness. As the court cases advanced, the administration extended the pause on student loan payments that has existed throughout the coronavirus pandemic.

The Biden administration also pushed the justices Tuesday to find that the borrowers did not have the right to sue.

Prelogar said that allowing the suits, particularly one from the Texas borrowers, would “blow open the doors” to further suits against agency actions.

Justice Ketanji Brown Jackson and others on the court questioned whether they should even allow the suits at all.

“I’m concerned that we’re going to have a problem in terms of the federal government’s ability to operate,” if the court broadens the rules for when agencies can be dragged into court, Jackson said.

Support for the forgiveness program has broken down along party lines, with numerous lawmakers, including Sen. Elizabeth Warren, D-Mass., joining more than 100 protesters outside the court in favor of the program during oral arguments.

On the other side, a majority of Republicans in Congress filed separate briefs arguing the justices should find the program unlawful. The Republican-controlled House is unlikely to act on the program.

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