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

Key takeaways from the SCOTUS oral arguments in cases challenging Biden’s student debt forgiveness plan

From CNN's Tierney Sneed and Devan Cole

Police officers walk outside the Supreme Court on Capitol Hill in Washington, DC on Tuesday.
Police officers walk outside the Supreme Court on Capitol Hill in Washington, DC on Tuesday. (Patrick Semansky/AP)

The Supreme Court heard oral arguments Tuesday in two challenges to President Joe Biden’s student debt relief plan, with several conservative justices appearing skeptical of the government’s authority to discharge millions of dollars in federally held loans.

If the conservatives do ultimately rule in favor of the policy’s challengers, the hearing made clear they will have to grapple with the legal questions around why states and individual borrowers should be allowed to sue over the program – questions that emerged as a flash point during the arguments.

Millions of qualifying student loan borrowers could see up to $20,000 of their debt canceled depending on the outcome of the arguments. How and when the justices rule will also determine when payments on federal student loans will resume after a pandemic-related pause was put in place nearly three years ago.

In Biden v. Nebraska, a group of Republican-led states argued the administration exceeded its authority by using the pandemic as a pretext to mask the true goal of fulfilling a campaign promise to erase student-loan debt.

The second case is Department of Education v. Brown, which was initially brought by two individuals who did not qualify for the program and argue the government failed to follow proper rulemaking process when putting it in place.

Here are some takeaways from the oral arguments:

Conservatives see this case as another chance to rein in aggressive actions by Biden: In the questions the conservative justices posed, they signaled that they see the GOP states’ case as presenting the court with another chance to draw the lines around when the executive branch can and cannot act without Congress.

Several of the exchanges concerned the application of the so-called “Major Questions Doctrine,” a legal theory embraced by the court’s Republican appointees that says Congress can be expected to speak with specificity when it gives an agency power to do something of great political or economic significance.

The states are arguing that under the doctrine, the Biden student debt program should be blocked.

Chief Justice John Roberts said to US Solicitor General Elizabeth Prelogar that the case “presents extraordinarily serious important issues about the role of Congress.”

Justice Brett Kavanaugh asked Prelogar to compare the dispute to cases in the court’s history where the court ultimately pushed back against government claims that a national emergency justified the aggressive, unilateral action by the executive branch. And Justice Neil Gorsuch asked Nebraska Solicitor General James Campbell, who is representing the red states, a series a questions that seemed aimed at helping the court further flesh out the doctrine.

Lawyer for GOP state gets grilled on standing: Whether the GOP states are threatened by the type of harm that makes it appropriate for a court to intervene was a major theme. Nebraska Solicitor General James Campbell received a series of questions – from justices on both sides of the ideological spectrum – about whether the states had overcome this procedural threshold, which is known as “standing.”

A particular flashpoint in the hearing was the states’ arguments that the loan forgiveness program’s potential harms to MOHELA – the Missouri-created entity that services loans in the state – gives Missouri standing. Several justices noted that MOHELA could have filed its own lawsuit challenging the program, but has not.

Barrett may be a justice to watch: Justice Amy Coney Barrett has stood out among the conservatives for asking particularly pointed questions of the GOP states about their standing arguments, setting her apart as a potential pick up vote for the court’s three liberal members.

“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, among several questions she asked him about the states’ standing claims.

Even if Barrett swings to the liberals to vote that the lawsuit should be rejected because of the standing concerns, the Biden administration will need the vote of one more GOP-appointed justice.

Sotomayor raises the practical stakes of the case: In extended remarks to Campbell, Justice Sonia Sotomayor laid out the practical implications of the case in stark terms.

“There’s 50 million students who are – who will benefit from this. Who today will struggle. Many of them don’t have assets sufficient to bail them out after the pandemic. They don’t have friends or families or others who can help them make these payments,” she remarked. Those debtors will suffer in ways others won’t because of the pandemic, she said.

“And what you’re saying is now we’re going to give judges the right to decide how much aid to give them instead of the person with the expertise and the experience the secretary of Education who’s been dealing with educational issues and the problems surrounding student loans,” she said.

Read more takeaways here.

2:05 p.m. ET, February 28, 2023

Experts stress the importance of state governments' role in addressing college affordability

From CNN's Elise Hammond

President Joe Biden speaks about the student debt relief portal beta test in the South Court Auditorium on the White House complex in Washington on October 17, 2022.
President Joe Biden speaks about the student debt relief portal beta test in the South Court Auditorium on the White House complex in Washington on October 17, 2022. (Susan Walsh/AP)

President Joe Biden’s plan to forgive up to $20,000 of student loans for some people is on pause as challenges make their way through the court system — but experts say there is a college affordability problem that needs to be addressed.

Mamie Voight, the president and CEO of the Institute for Higher Education Policy, said states have an important role in accomplishing this. States need to invest “really heavily in their public institutions to keep those tuition costs low for students” and minimize the need to borrow.

One example, she said, is states' ability to direct grant aid and help students, particularly from low-income backgrounds, cover both the cost of tuition and the cost of living.

When students are deciding where to go to college and how to pay for it, the idea is that “they’re able to piece together investments from the federal government through the Pell Grant, hopefully relatively low tuition costs because of state investment in public higher education and grants and scholarships from the institutions that are directed to students who really couldn't afford to go to college without that financial support,” Voight said.

If the affordability issue isn't solved, higher education and the opportunity for economic mobility, won’t be attainable for many people, Voight said.

“It’s really incumbent upon policy maker at the federal, state and institution level to really address these challenges” both in the short-term and the long-term, she said, stressing that idea of a shared partnership.

Elizabeth Shermer, a historian and associate professor at Loyola University Chicago, said she agrees with the importance of state involvement.

“It always comes from the local and state up to the federal, that's how it’s always worked,” she said.

The way forward, in her opinion, is legislation that connects states and the federal government together on the issue by creating high-quality, tuition-free options for students to put pressure on four-year institutions to lower their tuition prices.

She said she supports the proposed College for All Act, introduced by Sen. Bernie Sanders and Rep. Pramila Jayapal, that would do this. Alternatively, offering two free years of community college would also accomplish that same competition she believes is necessary for long-term change.

1:41 p.m. ET, February 28, 2023

Oral arguments have finished

From CNN's Katie Lobosco

The Supreme Court finished hearing oral arguments in two cases challenging President Joe Biden's student loan forgiveness program.

What may happen next: Under normal circumstances, a case with such high political stakes would likely be resolved in late June or early July. But because the justices expedited the briefing, there is a possibility they may prioritize the opinion and release it before the end of the term.

If the Supreme Court rules that the Biden administration’s student loan forgiveness program is legal and allows it to move forward — or if the court dismisses the challenges due to a lack of “standing,” or the legal right to bring the disputes in the first place — it’s possible the government will begin issuing some debt cancellations fairly quickly.

If the court strikes down the program, it could be possible for the administration to make some modifications to the policy and try again – though that process could take months.

1:34 p.m. ET, February 28, 2023

US solicitor general returns to podium for rebuttal and closing argument on behalf of Biden administration

From CNN's Ariane de Vogue and Tierney Sneed

US Solicitor General Elizabeth Prelogar is now at the podium again to deliver her rebuttal and closing arguments.

During today's hearing, Prelogar has argued that the administration has the clear legal authority to provide relief to borrowers in order to protect them from the financial harms brought on by the pandemic, such as the inability to buy food or make rent or mortgage payments.

She stressed that the Higher Education Relief Opportunities for Students Act of 2003 —known as the HEROES ACT— provides the legal authority for the relief. She will also say that the states do not have the sufficient injury necessary to bring the claim in the first place.

Prelogar told the Supreme Court that it should not be thinking about the political debate over student debt that predated the pandemic when the justices consider whether Biden's forgiveness program is lawful.

1:28 p.m. ET, February 28, 2023

Court's liberals shoot back at conservatives' focus on "fairness" of Biden debt relief program

From CNN's Tierney Sneed

The court's liberals pushed back on how conservative justices had focused on whether the Biden student debt relief program was fair to all borrowers. The issue is key to the case the court is hearing now, because the challengers -- two borrowers -- claim they were unlawfully deprived of a notice-and-comment period to argue to the agency that the program wasn't fair to them.

"I think the bottom-line answer to be, everybody suffered in the pandemic. But different people got different benefits because they qualified under different programs, correct?" Justice Sonia Sotomayor noted to US Solicitor General Elizabeth Prelogar.

Sotomayor: There is an "inherent unfairness in society because we're not a society of unlimited resources."

Justice Ketanji Brown Jackson echoed that point, telling Prelogar, "I'm wondering whether or not the same fairness issue would arise with respect to any federal benefit programs."

1:09 p.m. ET, February 28, 2023

Attorney representing student borrowers is now at the podium

From CNN's Ariane de Vogue

Attorney J. Michael Connolly is now taking the podium on behalf of two student borrowers — Myra Brown and Alexander Taylor.

Connolly works for the boutique law firm Consovoy McCarthy, which also represented former President Donald Trump in some of his legal battles.

Connolly is likely to repeat what he said in briefs, that the HEROES Act “does not authorize the Secretary to cancel nearly half-a-trillion dollars in debts held by tens of millions of individuals."

This case may not go as long as the first because so many of the issues are the same. Prelogar is then expected return to end the marathon session.

What happens next: Under normal circumstances, a case with such high political stakes would likely be resolved in late June or early July. But because the justices expedited the briefing, there is a possibility they may prioritize the opinion and release it before the end of the term.

1:21 p.m. ET, February 28, 2023

Prelogar tells Kavanaugh that court shouldn't think about political debate over debt relief when it rules

From CNN's Tierney Sneed

US Solicitor General Elizabeth Prelogar told the Supreme Court that it should not be thinking about the political debate over student debt that predated the pandemic when the justices consider whether Biden's forgiveness program is lawful.

She was responding to a question from Justice Brett Kavanaugh. He noted that student debt relief was "something on the table," that was being "discussed' and "debated" before it became part of the government's response to the Covid-19.

Prelogar discouraged the justices from taking those political dynamics into account in their ruling on the scope of the HEROES Act, the law that the Biden administration says gives it the authority to enact the program.

She told Kavanaugh to put himself in the shoes of the 2003 Congress hat passed that law. She argued that those lawmakers couldn't have anticipated whether or not debt relief was the subject of political debate when a national emergency in the form a pandemic hit.

She said that if the court lets those political dynamics affect its ruling, it will have "disabled" Congress' ability to pass laws to ensure that the executive branch can respond quickly to emergency.

2:10 p.m. ET, February 28, 2023

Conservative justices continue to say Biden's debt relief program is unfair

By CNN's Katie Lobosco

The conservative justices have peppered US Solicitor General Elizabeth Prelogar with questions about why President Joe Biden's proposed student loan forgiveness program is fair in respect to people who won't benefit — those who have already paid off their student debt or never took out student loans to begin with, for example.

After justices, including Chief Justice John Roberts, asked several times about the fairness of the program, Justice Samuel Alito posed the question again.

"Why was it fair to the people who didn't get arguably comparable relief, not maybe that their interests were outweighed by the interests of those who were benefited or they were somehow less deserving of solicitude," Alito asked.

"My answer to that question is that Congress has already made the judgment that when there is a national emergency that affects borrowers in this way, the secretary can provide relief," Prelogar said.

She pointed to language in the HEROES Act that says the education secretary can waive or modify federal student loan programs to ensure that borrowers "are not placed in a worse position financially in relation to that financial assistance."

2:09 p.m. ET, February 28, 2023

US solicitor general hammers individual borrowers' case on "standing"

From CNN's Katie Lobosco

US Solicitor General Elizabeth Prelogar argued that the two plaintiffs – student loan borrowers Myra Brown and Alexander Taylor — don't have the legal right, or "standing," to bring the case.

Under President Joe Biden's proposed student loan forgiveness program, neither plaintiff would qualify for the maximum amount of debt relief. Brown doesn't qualify at all because her loans are privately held and Taylor is only eligible for up to $10,000 of debt relief — not up to $20,000 — because he did not receive a Pell grant while enrolled in college.

"They claim to want greater loan forgiveness than the plan provides. But they asked this court to hold that the HEROES Act doesn't authorize loan forgiveness at all," Prelogar said.

If the Biden program is struck down, not only would the plaintiffs get no relief at all, but no one else would either.

"Parties cannot go to court to make themselves and everyone else worse off," Prelogar said.