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Biden's plan for student loan relief faces its biggest test yet at the Supreme Court


Six Republican-dominated states are asking the U.S. Supreme Court today to permanently block the Biden administration's student loan forgiveness program. Here's NPR legal affairs correspondent Nina Totenberg.

NINA TOTENBERG, BYLINE: After the 9/11 terrorist attack, Congress passed a law to ensure that federal student loan borrowers would not be economically clobbered in a national emergency. The law specifically says that when the president declares such an emergency, the secretary of education has the power to, quote, "waive or modify any statutory or regulatory provision governing student loan programs." During the pandemic, the Trump and Biden administrations both invoked the law to pause student debt payments without penalties. And last year, President Biden went further.


PRESIDENT JOE BIDEN: My campaign for president - I made a commitment that we'd provide student debt relief. And I'm honoring that commitment today.

TOTENBERG: Under the Biden plan, borrowers making up to $125,000 could qualify for as much as $10,000 in cancellation of their student debt. Individuals who received federal student aid based on financial need could qualified for as much as $20,000 in relief. And already 16 million student loan borrowers have been approved for some loan forgiveness. Before any debt was canceled, though, two lower courts put the program on hold. And today, the Supreme Court hears expedited arguments in a challenge to the Biden plan brought by six states - Missouri, Nebraska, Iowa, Arkansas, Kansas and South Carolina.

The merits of the case are fairly straightforward. Does the 2003 law known as the HEROES Act give the president and his secretary of education the power to authorize federal student loan forgiveness? University of Texas law professor Stephen Vladeck, who consulted informally with the White House on this case, says it does. He says the words of the statute are clear and expansive.

STEPHEN VLADECK: At its core, the real objection is that this is a stunningly broad grant of authority from Congress to the secretary of education. The plain text of the statute - it's broad, but it's not vague when it talks about the secretary's power to waive or modify any statutory or regulatory provision applicable to programs like federal student aid.

TOTENBERG: Case Western University law professor Jonathan Adler, however, says waiving or modifying loan requirements is not the same thing as canceling the obligation to pay back some or all of the loan.

JONATHAN ADLER: Modifying and waiving regulations and requirements applicable to the loan program is different than erasing the underlying loan. The current court has made clear that it is reluctant to believe that Congress delegates big power without being explicit.

TOTENBERG: Adler concedes the statute's language is broad, but, he says, likely not broad enough for the very conservative Supreme Court of today.

ADLER: It is certainly fair to claim that the court is putting a thumb on its scale on the way that statutory language like this is being interpreted. The court is basically saying when in doubt, we assume Congress didn't give the power. If we have to argue about, well, we read the statute this way or to read the other way, the Department of Education has already lost.

TOTENBERG: However the court rules, its decision will have huge practical effects for millions of people with outstanding federal student loans, particularly borrowers who have lower incomes. That said, the case could have an even greater impact on both red and blue states if the justices decide that the states in this case do not have the right to sue at all because they can't show that they've suffered any real harm. In recent years, Republicans have repeatedly parlayed state lawsuits into a forceful tool to get the conservative court to block Biden administration policies. But Democrats did the same thing during the Trump administration with less success. The Biden administration's student loan plan offers the court at least the opportunity to limit some of these challenges because in order to have legal standing to bring a lawsuit, you first have to show that you've been harmed. Again, Professor Adler.

ADLER: As a general matter, it's much harder to challenge a governmental action that does something nice for somebody else, then a governmental action that harms you. As a consequence, the states here have had to be creative in terms of figuring out how to identify an impact on them from the forgiving of student loans to other people.

TOTENBERG: Indeed, the six states that are challenging the Biden plan have thrown everything at the wall to make such a showing. Among the plaintiffs, for instance, are two individuals who don't qualify for loan forgiveness. The one argument that Adler thinks likely may hold water is Missouri's claim that the Biden plan could end up depriving the state of revenue from the Missouri Higher Education Loan Authority, known as MOHELA. MOHELA's an independent corporation explicitly not involved in the state's challenge. But it is a state-created entity that is one of the largest holders and servicers of student loans in the country.

The state of Missouri claims that because MOHELA would lose servicing fees on federal loans that are discharged, the agency might fail to make its required payments to the state treasury. Professor Vladeck thinks that won't fly.

VLADECK: The Supreme Court has said for a decade that a future injury can't be a basis to sue unless it is, in the words of Justice Alito, quote, "certainly impending."

TOTENBERG: All of this may sound like how many angels can dance on the head of a pin, but if the court says the states don't have standing to sue, that they have not suffered any concrete harm, President Biden's loan forgiveness plan likely will go into effect, and an estimated 43 million borrowers with federal student loans will get some relief. The price tag, according to the Congressional Budget Office, would be $300 billion.

Nina Totenberg, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Nina Totenberg is NPR's award-winning legal affairs correspondent. Her reports air regularly on NPR's critically acclaimed newsmagazines All Things Considered, Morning Edition, and Weekend Edition.