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Will Biden’s Student Loan Debt Cancellation Plan Hold Up in Court?


President Joe Biden has announced a plan to use executive authority to cancel up to $10,000 in student loan debt for every borrower who earns less than $125,000 a year while canceling up to $20,000 for every borrower who took out a Pell Grant and earns less than $125,000 a year. Typically, an action of this sort would be performed by Congress, not the president, since it is Congress that is exclusively vested with the federal spending power under the U.S. Constitution (see Article I, Section 8). So where does Biden purport to get the authority to do this and will his legal justifications hold up in court?

The Biden administration says it has the authority to unilaterally cancel student loan debt under the terms of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003. According to President George W. Bush, who signed the act into law, it “permits the Secretary of Education to waive or modify Federal student financial assistance program requirements to help students and their families or academic institutions affected by a war, other military operation, or national emergency.” Basically, the HEROES Act was designed to let the executive branch ameliorate the student loan situations of service members fighting the war on terror.

In other words, Biden is invoking a post-9/11 expansion of executive power to justify his current actions. What is the “war, other military operation, or national emergency” that now triggers the statute? According to an opinion released yesterday by the Office of Legal Counsel, which provides legal advice to the executive branch, the Department of Education “asked whether the HEROES Act authorizes the Secretary [of Education] to address the financial hardship arising out of the COVID-19 pandemic by reducing or canceling the principal balances of student loans for a broad class of borrowers. We conclude that the Act grants that authority.” In sum, according to both the Office of Legal Counsel and the Biden administration, the COVID-19 pandemic is the national emergency that authorizes this particular exercise of executive power under the HEROES Act.

The conservative writer and lawyer David French says that Biden’s plan “is on very thin legal ground.” He may be right. But I would not underestimate the high amount of judicial deference that presidents tend to get from federal judges when they claim to be acting in the name of national security or claim to be dealing with a national emergency.

What is more, the text of the HEROES Act does seemingly grant broad emergency powers to the executive, and it does so not just during wartime. It authorizes the Department of Education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Higher Education] Act as the Secretary [of Education] deems necessary in connection with a war or other military operation or national emergency.” (Emphasis added.) Should Biden’s plan ever land in federal court, one of the big questions for the judiciary will be whether the COVID-19 pandemic qualifies as a national emergency for the purposes of the statute. Plenty of federal judges may be willing to give Biden the leeway he wants here, including some Republican appointees on the current Supreme Court.

Any legal challenge to Biden’s student loan plan will also face another difficulty. Namely, there will be the question of just who has the requisite legal standing the sue the government over this executive action in the first place. And that could be a difficult hurdle to clear. Remember that the Supreme Court has repeatedly said that aggrieved taxpayers do not, as a general rule, have standing to sue the government over allegedly unconstitutional laws. The Court reaffirmed this in Hein v. Freedom From Religion Foundation (2007), in which a group opposed to government funding of religious activity sued the George W. Bush administration over its creation (via executive order) of the Faith-Based and Community Initiatives program. “Generally, a federal taxpayer’s interest in seeing that Treasury funds are spent in accordance with the Constitution is too attenuated to give rise to the kind of redressable ‘personal injury’ required for Article III standing,” wrote Justice Samuel Alito.

Many taxpayers will undoubtedly consider themselves injured by Biden’s student loan forgiveness plan. But that won’t cut it for standing purposes. My guess is that smart conservative lawyers are already on the hunt for a client with a better shot at standing so the inevitable legal challenges may begin. We’ll see who they find.



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