(CNN) — The Supreme Court ruled Tuesday on President Joe Biden’s student loan forgiveness program, an initiative aimed at providing debt relief to millions of student loan borrowers that has so far been stalled due to legal issues.

Republican-led states and conservatives who question the program say it amounts to an illegal attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

At the heart of the case is whether the Department of Education had the authority to forgive the debts on those loans. Several of the conservative justices have pointed out in recent years that the agencies, without direct accountability to the public, have become too powerful, upsetting the separation of powers.

Tuesday’s decision will also highlight an important question that could prevent the court from getting to the bottom of the dispute: whether the parties behind the challenge have the legal right, or the necessary “foundation,” to sue.

The arguments

The Biden administration argues that the education secretary had clear authority to provide the aid to borrowers earning less than $125,000 a year ($250,000 for households) in 2020 or 2021 to protect them from harm. caused by the pandemic, such as the inability to buy food or make rent or mortgage payments.

On the state side, Nebraska Attorney General Michael T. Hilgers, who also represents Missouri, Arkansas, Iowa, Kansas and South Carolina, stressed that the Biden government exceeded its authority by using the pandemic as a pretext to mask the true goal of fulfilling an election promise to erase student loan debt.

The Court is hearing oral arguments in a matter that is on hold after a lower court blocked the plan in November. In that context, several conservative judges were skeptical about the government’s authority to forgive the payment of millions of dollars in federal loans.

If the conservatives ultimately rule in favor of the policy challengers, the hearing will leave it clear that they will have to grapple with legal questions about why states and individual borrowers can sue over the program, issues that came up as flashpoints during arguments. .

Millions of student loan borrowers who qualify for the program could see up to $20,000 of their debt canceled depending on the outcome of the arguments. How and when the judges rule will also determine when federal student loan payments resume after a pandemic pause was implemented nearly three years ago.

The so-called “important issues doctrine”

The so-called “important issues doctrine” was widely mentioned and received a lot of attention during the debate of the red states case before the judges on Tuesday. But what exactly does it consist of?

In the previous term, the Court cited the “important issues doctrine” in a 6-3 decision that curbed the Environmental Protection Agency’s ability to widely regulate carbon emissions from existing power plants.

According to this theory, if an agency acts in a way that could have significant political or economic implications, it must have the authority of Congress for them. What the states are arguing is that, essentially, the college debt relief plan is too big for the Biden administration to rely on the authority of the Department of Education alone.

Judge Neil Gorsuch

During Tuesday’s hearing, Judge Neil Gorsuch asked whether the Biden administration considered the cost this will take for people who are ineligible for the student loan forgiveness program because they don’t have student loans.

The plaintiffs said that what is missing from the government’s analysis, according to Gorsuch, is the “cost to other people in terms of equity, for example, people who have repaid their loans … and people who are not directly eligible for the loans”.

He was referring to Americans who did not go to college or who have already paid off their student loans, who will not see a direct benefit from the Biden program, which the Congressional Budget Office has estimated will cost $400 billion.

About 81% of households with incomes less than $125,000 a year have no student loan debt, according to an analysis last year by Matthew Chingos, vice president of education data and policy at the Urban Institute. He based the estimate on the 2019 Survey of Consumer Finances conducted by the Federal Reserve.

Justice John Roberts, President of the Court

Chief Justice John Roberts called attention to the fact that the Biden administration wants to use a power to “modify” federal student loan programs to pay off roughly $400 billion in debt.

“In an opinion a few years ago by Justice (Antonin) Scalia, he talked about what the word ‘modify’ means, and said that ‘modified’ in our opinion connotes moderate change,” Roberts said.

US Chief Justice John Roberts (Jacquelyn Martin-Pool/Getty Images)

“We can say that the French Revolution changed the status of the French nobility, but only because there is a form of speech called understatement and a literary device known as sarcasm,” Roberts said.

“We’re talking half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of ‘modify’?” Roberts asked.

US Attorney General Elizabeth Prelogar argued that, in the context of the statute, “amend has to mean make a change to the point of complete removal.”

“It would be really weird for Congress to say that it can remove the obligations entirely or tweak them a bit. But that I can’t do anything in the middle of it,” he said.

Judge Samuel Alito

Judge Samuel Alito focuses on the “fundamentals”: the damage to states that they say justifies judicial intervention.

It wasn’t long before the topic of “fundamentals” came up in Tuesday’s arguments about the student loan relief program.

What does this mean? “Bases” refers to the harm that a plaintiff must show that he is facing in order for a court to intervene. The Biden government argues that the challengers have not passed this procedural threshold, which means the Supreme Court could reject their case without even going into the legal merits of the relief program.

Judge Samuel Alito delved into the issue by questioning US Attorney General Elizabeth Prelogar, noting that he sympathized with the argument that the states that sued the government had established their standing. He specifically pointed to Missouri’s assertion that the revenue shortfall caused by Biden’s action could cause the Missouri Higher Education Loan Authority (MOHELA), an entity that was created by the state to servicing student loans, will cause chain financial damage to Missouri itself.

“Why shouldn’t the test be something more like whether the relationship between this entity and the state of Missouri is such that an injury to MOHELA will necessarily or presumably be an injury to the state?” Alito said.

Judge Ketanji Brown Jackson eventually stepped in to support a Prelogar argument: that the financial interests of Missouri and MOHELA were not intertwined enough to give Missouri a footing.

Judge Clarence Thomas

Judge Clarence Thomas began the first round of questions, asking US Attorney General Elizabeth Prelogar how mass loan forgiveness is similar to the terminology used in the relevant statute.

“Could you take a minute to explain how a waiver or modification equals a … cancellation?” Thomas said.

Supreme Court Justice Clarence Justice (Credit: OLIVIER DOULIERY/AFP via Getty Images)

Opponents of the Biden administration’s initiative in the case say the terms “waive” or “modify” in the law that gives the Secretary of Education certain powers apply to smaller actions to adjust payment plants, in instead of a blank cancellation of the debt class in question.

Prelogar told Thomas that the law in question, the HEROES Act, contemplates many forms of action that a Secretary of Education could take in the face of a national emergency. Congress was trying to “cover the field” to give the secretary tools to respond to a national emergency, she said.


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