The Matter of Standing in Student Loan Forgiveness

On August 28th, 2022, President Joe Biden announced via Twitter that his administration would be creating a plan to ease the burden of student loans in the face of COVID-19. Two months later, on October 12, 2022, Secretary of Education, Dr. Miguel A. Cardona, cited the Higher Education Relief Opportunities of Students (HEROES) Act as legal justification for the forgiveness of student loans. Specifically, Dr. Cardona invoked the provision of this Act allowing waiver authority:           

In general.--Notwithstanding any other provision of law, unless enacted with specific reference to this section, the Secretary of Education (referred to in this Act as the “Secretary”') may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the Act as the Secretary deems necessary in connection with a war or other military operation or national emergency to provide the waivers or modifications authorized by paragraph 2.

Thus, proponents argue that the HEROES Act is applicable to the current COVID-19 national emergency, which went into effect on March 13th, 2020.

However, criticism of President Biden’s plan came to light formally when six traditionally Republican states–Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina–chose to sue, filing Biden v. Nebraska on the basis that the Plan violates separation of powers, as well as the Administrative Procedure Act (APA) and Higher Education Act (HEA); however, the case was thrown out due to locus standi, a lack of standing. 

Similarly, another lawsuit developed when Myra Brown and Alexander Taylor sued the Department of Education in the Northern District Court of Texas. While both have student loans, Brown does not qualify for debt forgiveness under Biden’s Plan since her loans are commercially granted, while Taylor can receive only $10,000 due to not having a Pell Grant. They sued on the basis that the Secretary failed to follow appropriate rulemaking procedures, and did not provide any opportunity for feedback; perhaps if given the opportunity for comment, the respondents argue, the Plan could have been amended to be pertinent to a wider pool of citizens. However, this case was also dismissed by the District Court on the basis of a lack of standing.

Standing is a fundamental condition that essentially refers to the legal right to sue. As the late Justice Scalia outlined in Lujan v. Defenders of Wildlife, any litigant seeking federal court jurisdiction must satisfy three requirements as the “irreducible constitutional minimum of standing”: a) have suffered an injury in fact that is ‘concrete’, ‘particularized’, and ‘actual or imminent, not conjectural or hypothetical’; b) a causal connection between the injury and the conduct complained of; and c) it must be “likely”, as opposed to “merely speculative” that a favorable decision will redress the injury. The cardinal question in regards to student loan forgiveness is who has the appropriate legal standing to allow the court to provide judicial relief.

There is even a possibility that nobody will have the necessary standing to receive a formal judgment on this matter. This is based on the argument that the Plan provides citizens with a benefit, and the existence of that benefit arguably cannot cause injury.

However, precedent indicates that this may not be the case. In Northeastern Florida Chapter of General Contractors of America v. City of Jacksonville, the Supreme Court ruled that in the instance of a government benefit, if the petitioner demonstrates that its members faced an injury as a result of the challenged ordinance and a positive decision could help to rectify that injury, then they do have standing. The majority decision in this case established that a potential lack of fair opportunity by virtue of the ordinance could constitute injury. Similarly, in Bowsher v. Synar, the Court ruled that the inability to receive benefits is cause in itself for injury and thus provides standing.

The importance of standing is that it essentially serves as a check on the judiciary. In Broadrick v. Oklahoma, Justice Byron White made the statement that “under our constitutional system, courts are not roving commissions assigned to pass judgment on the validity of the Nation's laws.” The presence of standing ensures that the court abides by its constitutional duty. For the parties involved in the case, however, this can elongate the process greatly and impede the entire judicial process.

The plaintiffs in Department of Education v. Brown argue that they have cause for injury, as they have been denied their procedural rights guaranteed under the American Procedure Act (APA). According to the APA, student loan regulations must go through negotiated rulemaking and notice-and-comment rulemaking, which postulate that proposed rules are to be presented to the public for review and general comment before they are implemented.[8] In Texas v. EEOC, the court found that an issued guidance violated the APA by failing to follow notice-and-comment procedures; thus, the guidance was struck down.

In response to this claim, Solicitor General Prelogar states that “the statutory text is very clear…they haven’t actually been deprived of any procedural rights. The HEROES Act specifies that waivers and modifications issued under the HEROES Act are exempt from notice and comment.” Thus, the argument that procedural rights were violated can feasibly be considered null and void.

According to the Federal Register, the APA does allow federal agencies to finalize rules without posting them for negotiated rulemaking and/or notice-and-comment, if such a process is deemed “impracticable, unnecessary, or contrary to the public interest.” Thus, perhaps the Plan was appropriately expedited in its application, as it relates to a fundamentally critical situation: national emergency.

However, despite the fact that these two cases were dismissed by their respective district courts, a writ of certiorari was issued on December 1st, 2022, to allow the Supreme Court to hear Biden v. Nebraska. Another writ of certiorari was issued on December 12th in Department of Education v. Brown. This debate about student loan forgiveness came to a head on February 28th, 2023, when the Supreme Court heard both cases separately.

These cases not only addressed the matter of standing once again, but also whether the Executive Branch has the legal authority to address the $1.6 trillion worth of federal student loan debt under the HEROES Act. Notably, in Biden v. Nebraska, Chief Justice John Roberts questioned General Elizabeth Prelogar, “We’re talking about half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of ‘modifying’?”

The power of the executive has been addressed by the courts in the past. In Clinton v. City of New York, the Court first established standing on the basis that the President’s actions led to immediate and concrete injuries. Perhaps more importantly, however, was the Court’s opinion on the power of the President to pass legislation. In Biden v. Nebraska, it was argued that the HEROES Act does not endorse the “wholesale rewriting of statutes whenever an emergency arose.” Plaintiffs argued that Biden’s actions are  a direct violation of Clinton, in which the President’s actions of canceling portions of bills were deemed unauthorized amendments to prior legislation. Such “amendments” are prohibited by the Presentment Clause, which states that any legislation passed by both the Senate and House of Representatives must be approved or rejected in entirety by the President. 

However, since the HEROES Act was found to be unsupportive of such an expression of executive power, proponents of the forgiveness plan must look elsewhere for avenues to relief. Given the likelihood the Court would overturn the program, some political elites preemptively presented an alternate solution. On February 4th, 2021, Senator Elizabeth Warren posted a press release on her website entitled “Warren, Schumer, Pressley, Colleagues: President Biden Can and Should Use Executive Action to Cancel up to $50,000 in Federal Student Loan Debt Immediately.” This resolution calls upon the president to harness his executive power to strong-arm the passage of a student loan forgiveness program.  

This is based on an interpretation of the Higher Education Act (HEA), which states that the Secretary of Education may “...modify, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” However, this interpretation may be a misunderstanding of the true purpose of this Act. The language of this section seems to suggest that the Secretary is granted this power in relation to Part B of Title IV of the same Act–which only applies to loans under the Federal Family Education Loan (FFEL) Program. Thus, it cannot be applied to any instance of student loan debt forgiveness.

Under Chapter 13 of the U.S. Code and Article I Section 7 of the Constitution, without support from the HEA, the President has no power to use executive authority for such a wide scale cancellation of loan without Congressional approval.Additionally, the Court ruled in Whitman v. American Trucking Associations, Inc. that Congress does not “hide elephants in mouseholes;” the purpose of this imagery by Justice Scalia is to convey the idea that the courts cannot abide by executive agency opinions, if they do not possess legislative support.

These cases are a very powerful indication of how legal standing and executive power will be evaluated from this moment forth. The Supreme Court’s decision is an indication of this. On June 30th, 2023, the Court released its decision on Biden v. Nebraska. In a 6-3 vote along ideological lines, the court ruled that the Secretary of Education simply does not have the authority to cancel $430 billion of student debt. Chief Justice John Roberts, writing for the majority, stated that “the authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them.” Department of Education v. Brown also received a formal ruling on June 30th, but was handled differently by the Court. Justice Alito, writing for the Court, expressed that “we do not resolve respondents’ procedural claim because we conclude that they lack standing to bring it.”

Ultimately, both decisions further establish the importance of judicial checks on executive power, and the importance of standing. While Biden v Nebraska ultimately came to a head by establishing legal standing at the SCOTUS level, it is certainly possible that Department of Education v. Brown may never have acquired the necessary standing to be formally decided. It could also be argued that the resolution in Biden v. Nebraska essentially resolved the main complaint in Department of Education v. Brown, nullifying the need for standing. As Justice Alito states, referencing the Court’s opinion in Carney v. Adams, “this case begins and ends with standing” The understanding of this fundamental legal principle could be the key to solving future cases.

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1 The Higher Education Relief Opportunities for Students Act of 2003, Pub. L. No. 108-76, 117 Stat. 904 (2003) (codified at 20 U.S.C. §§ 1098aa–1098ee) (“HEROES Act of 2003,” or “HEROES Act”)

2 Dan Schweitzer, Supreme Court Report: Biden v. Nebraska, 22-506, Volume 30 Issue 3, https://www.naag.org/attorney-general-journal/supreme-court-report-biden-v-nebraska-22-506/

3 Legal Information Institute, “Department of Education v. Brown”, https://www.law.cornell.edu/supct/cert/22-535 

4 Lujan v. Defenders of Wildlife, 504 U.S. 555, No. 90-1424 (D. June 12, 1992).

5 Northeastern Florida Chapter, Associated General Contractors of America v. City of Jacksonville, Florida, Oyez, https://www.oyez.org/cases/1992/91-1721.

6 Bowsher v. Cynar, 478 U.S. 714, No. 85-1377 (D. July 7, 1986). 

7 Broadrick v. Oklahoma, 413 U.S. 601, No. 71-1639 (D. June 25, 1973). 

8 5 U.S. Code § 553

9 Texas v. EEOC, No. 21-194, 2022 WL 4835346 (N.D. Tex. Oct. 1, 2022) (Kacsmaryk, J.)

10 Department of Education v. Brown, No. 22-535, Oral Argument (February 28, 2023).

11 supra note 5. 

12 Biden v. Nebraska, cert. granted, (U.S. December 1, 2022), (No. 22-506).

13 Ayana Archie, “Joe Biden's student loan forgiveness plan will cost $400 billion, budget office says”, NPR (September 27, 2022), https://www.npr.org/2022/09/27/1125272287/student-loan-forgiveness-cost-billion.

14 Biden v, Nebraska, No. 22-506, Oral Argument (February 28, 2023). 

15 Press Release, Elizabeth Warren, Warren, Schumer, Pressley, Colleagues: President Biden Can and Should Use Executive Action to Cancel up to $50,000 in Federal Student Loan Debt Immediately (February 4, 2021).

16 20 U.S. Code § 1087hh - General authority of Secretary

17 31 U.S. Code § 1301

18 531 U.S. 457, 468 (2001)

19 Biden v. Nebraska, No. 22-506 (D. June 30, 2023). 

20 Department of Education v. Brown, No. 22-506 (D. June 30, 2023). 

21 Ibid.