Supreme Court considers fate of Biden's student loan relief plan

By Elise Hammond, Tierney Sneed, Katie Lobosco and Adrienne Vogt, CNN

Updated 4:47 p.m. ET, February 28, 2023
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12:28 p.m. ET, February 28, 2023

The HEROES Act has been mentioned a lot today. Here are key things to know about the provision

From CNN's Katie Lobosco

The key legal question in the cases before the Supreme Court on Tuesday is whether the Higher Education Relief Opportunities for Students Act of 2003, known as the HEROES Act, grants the executive branch an emergency power to implement President Joe Biden’s student loan forgiveness program.

The HEROES Act, which was passed in the wake of the September 11, 2001, terrorist attacks, grants the secretary of education the power to “waive or modify” a federal student loan program in order to ensure that individuals “are not placed in a worse position financially” because of “a war or other military operation or national emergency.”

Lawyers for the Biden administration argue that this provision gives the secretary of education the authority to cancel federal student loan debt so that borrowers are not made worse off with respect to their loans by the effects of the Covid-19 pandemic.

They cite data that shows borrowers who previously had their payments paused due to an emergency like a hurricane were at a higher risk of default after the pause expired.

But plaintiffs argue the Biden administration is abusing its power and using the pandemic as a pretext for fulfilling the president’s campaign pledge to cancel student debt.

Even before ruling on the merits of the cases, the justices must consider whether the suing parties have standing to bring the legal challenges. This means that the parties must show that they have the legal injury necessary to be able to bring the challenge.

Last year, a district court found that the states did not have standing to sue. The states appealed to the 8th US Circuit Court of Appeals, which granted their request for a preliminary injunction.

If the justices decide that none of the parties have standing, the cases will be dismissed and Biden’s program will be allowed to move forward.

12:24 p.m. ET, February 28, 2023

US solicitor general is back at the podium as arguments in the second case start

From CNN's Ariane de Vogue

The Supreme Court has now moved on to hear arguments in the second case challenging President Joe Biden's student loan forgiveness program.

It just finished hearing arguments from a case brought by six states. The second case was initially brought by two student borrowers.

US Solicitor General Elizabeth Prelogar is back at the podium. She is expected to say that the students – Myra Brown and Alexander Taylor — like the states, don’t have the legal right to bring the case. She is likely to emphasize that the borrowers didn’t qualify for full relief in the first place, so they won’t be injured if the plan goes into effect.

12:23 p.m. ET, February 28, 2023

Kavanaugh asks where student debt disputes fit in how SCOTUS has handled other Covid-19 emergency cases

From CNN's Tierney Sneed

Justice Brett Kavanaugh sought some context on how the court should see the current dispute over student debt relief fitting within the larger spectrum of other cases dealing with executive branch actions aimed at the Covid-19 pandemic.

Kavanaugh referenced the court rulings that blocked Biden's eviction moratorium and the Covid-19 vaccine mandate requirement for certain businesses. But he also noted the Biden administration vaccine mandate for some health care facilities.

Kavanaugh told Nebraska Solicitor General James A. Campbell that one of the key distinctions in the health care vaccine mandate cases is that the policy was in the "wheelhouse" of the CDC, the agency that implemented it. He asked the Nebraska solicitor general to weigh in on the argument by the DOJ and others that loan forgiveness is also in the "wheelhouse" of the Education Department, distinguishing it from the cases where the court ruled against Biden Covid-19 policies.

Campbell said that the loan forgiveness policy was not in the Education Department's wheelhouse because it required the secretary to make a brand new cancellation program.

12:16 p.m. ET, February 28, 2023

US solicitor general makes rebuttal in first case

From CNN's Ariane de Vogue

US Solicitor General Elizabeth Prelogar is now offering a rebuttal in the first case challenging the Biden administration's plan to forgive student loans.

Nebraska's Solicitor General James A. Campbell was just at the podium arguing on behalf of the six Republican-led states that say they would be harmed financially if the forgiveness program goes into effect.

Prelogar has been arguing that the Department of Education has the authority to implement debt cancellation.

After this, the court is expected to hear arguments in the second case brought by two borrowers who don’t fully qualify for debt forgiveness under the program.

12:13 p.m. ET, February 28, 2023

What is MOHELA? Key things to know about a Missouri loan servicer that keeps being mentioned in the hearing

From CNN's Devan Cole and Ariane de Vogue

The justices have spent a considerable amount of time on Tuesday quizzing an attorney for the red states on why a student loan servicer created by Missouri didn’t bring the lawsuit before the court.

“Usually, we don't allow one person to step into another's shoes and say, ‘I think that that person suffered harm,’ even if the harm is very great,” Justice Elena Kagan said to Nebraska Solicitor General James A. Campbell. “So why isn't MOHELA responsible for deciding whether to bring this suit?”

Justice Amy Coney Barrett piled on later, asking Campbell: “If Mohela is an arm of the state, why didn't you just strong-arm MOHELA and say you've got to pursue this suit?”

The questions dig at the core of the Biden administration’s argument: that the states lack the legal right known as “standing” to challenge the debt relief program and that instead, the Missouri Higher Education Loan Authority (MOHELA) should have sued, since the servicer would have easily cleared the standing threshold.

A federal appeals court previously focused on one of the states behind the challenge, Missouri, and pointed to MOHELA, which has contracted with the federal Department of Education to service student loans. The court said that because MOHELA will stop receiving servicing fees for loans discharged under the new plan, it won’t be able to fulfill its obligation to contribute a specified amount of money to the state treasury. The appeals court ruled MOHELA is akin to a state entity and therefore said that it satisfied the standing requirement.

Critics of that theory say that MOHELA was established with financial and legal independence from the state of Missouri and the vast amount of its funds are segregated from state funds. They believe that for the purpose of the lawsuit, MOHELA cannot be considered an “arm of the state.”

12:02 p.m. ET, February 28, 2023

White House is monitoring oral arguments on student loan forgiveness

From CNN's MJ Lee and Elise Hammond

White House officials on Tuesday are closely monitoring oral arguments that are getting underway before the Supreme Court, keenly aware that what happens today inside the nation’s highest court will determine the fate of a major policy priority for President Joe Biden – canceling student loan debt.

The White House has expressed confidence it will prevail.

One of the main reasons comes down to standing, the source said, arguing that the burden is currently on the six Republican-led states and two borrowers in Texas — who have brought two cases against the administration — to prove that they have the legal authority to challenge the proposed program. Last year, a district court found that the states did not have standing to sue.

Biden announced last year a federal student loan forgiveness program that would forgive up to $20,000 in debt for some borrowers. The legal challenges have left many borrowers stuck in limbo.

The Supreme Court’s decision on the matter is not expected until this summer.

12:40 p.m. ET, February 28, 2023

Justice Elena Kagan: Congress clearly "used its voice," granting executive power in an emergency

From CNN's Katie Lobosco

Justice Elena Kagan expressed skepticism about the states' argument that the HEROES Act doesn't clearly give the education secretary the authority to cancel federal student debt in the case of an emergency.

"Congress used its voice," Kagan said.
"All this business about executive power, I mean, we worry about executive power when Congress hasn't authorized the use of executive power. Here, Congress has authorized the use of executive power in an emergency situation," she added.

Kagan stressed that she believes that Congress made the statute very clear in this respect.

"Congress doesn't get much clearer than that. And we deal with congressional statutes every day that are really confusing. This one is not," she added.

12:33 p.m. ET, February 28, 2023

"A systemic crisis": Rally-goers outside Supreme Court describe stress and challenges of student debt

From CNN's Aileen Graef

Student debt relief advocates gather outside the Supreme Court on Capitol Hill in Washington, DC on Tuesday.
Student debt relief advocates gather outside the Supreme Court on Capitol Hill in Washington, DC on Tuesday. (Patrick Semansky/AP)

As the nine justices hear oral arguments inside the Supreme Court, CNN spoke to people outside the building rallying for President Joe Biden's plan for student loan debt forgiveness .

Here's what some of them said:

Destiny Perry, a first-generation college student at Morgan State University in Baltimore, lives in a single-parent household of five.

“Right now, I have taken out a lot of loans. ... I'm out here trying to just go through college without having to stress about all the payments and everything else,” Perry said.

Perry said she explores scholarship opportunities to offset the debt, but she knows it will not be enough to graduate debt-free. 

Glen Lopez, a freshman at Morgan State, described his student debt as a "creeping feeling." He said that he thinks about the debt "every two to three days."

Rep. Ayanna Pressley told CNN she knows about student debt from a personal perspective.

"Well, what I was sharing is a story that is certainly no anomaly. This is a systemic crisis – a nearly $2 trillion crisis burning people from every walk of life,” the Massachusetts Democrat said. 

“Like those millions of Black borrowers – and I was growing up in single-parent household — and given financial strain, I had no choice but to take out those loans. I ultimately defaulted on those loans and I did pay off those loans, but it took me 20 plus years to do so. And I was gainfully employed and often living check to check and I simply could just not make ends meet. I just could not get ahead,” she said.

In response to opponents’ arguments that people should pay the loans they take out, Pressley said that “hardship is not a character flaw."

"And despite people's Herculean efforts working multiple jobs, given rising costs, people are treading water. They're treading water, and we can do something to alleviate this burden and this hardship,” she said.

Natalia Abrams, president and founder of the Student Debt Crisis Center, said she did not imagine the movement for student debt forgiveness getting this far.

“Over a decade ago, when we started this organization, we were lucky to just have Senator [Elizabeth] Warren fighting for us. We had one senator and were so happy. I never would have imagined 10 years later we’d be on the steps of the Supreme Court and having the President of the United States fight for student loan borrowers,” she told CNN.

11:59 a.m. ET, February 28, 2023

Justice Coney Barrett asks why GOP states didn't "strong-arm MOHELA and say you've got to pursue this suit?"

From CNN's Tierney Sneed

United States Supreme Court Associate Justice Amy Coney Barrett poses for an official portrait at the East Conference Room of the Supreme Court building on October 7, 2022 in Washington, DC.
United States Supreme Court Associate Justice Amy Coney Barrett poses for an official portrait at the East Conference Room of the Supreme Court building on October 7, 2022 in Washington, DC. (Alex Wong/Getty Images)

Nebraska Solicitor General James Campbell, who is representing all the GOP states suing over the debt relief program, received tough questions from several justices about whether the states have really proved that they would be harmed by the loan forgiveness program in a way that would warrant a court intervention.

That line of questions included a grilling from Justice Amy Coney Barrett, who zeroed in on how MOHELA — the Missouri-created entity that services loans in the state and which Missouri is pointed to as giving it standing — could have opted to challenge in court the debt relief policy but hasn't.

"If MOHELA is an arm of the state, why didn't you just strong-arm MOHELA and say you've got to pursue this suit," Barrett asked Campbell. He said that was a matter of state politics and Justice Elena Kagan jumped in to note that even to get records from MOHELA, Missouri has to use a state open records law.

Before Barrett's inquiries, Justice Ketanji Brown Jackson also pressed Campbell on whether the supposed harms the loan forgiveness program was causing MOHELA really established standing for Missouri, as did Kagan, who highlighted MOHELA's absence from the lawsuit.