Can Joe Biden's Student Loan Cancellation Plan Survive the Supreme Court?

On Friday, President Joe Biden asked the United States Supreme Court to revive his administration's student-loan relief plan shortly after a lower court ruled it was illegal.

The announcement, which was expected, presents a unique test for the conservative majority, which finds itself in a partisan deadlock between the Democratic administration and the cadre of conservative groups who oppose the program.

While the Supreme Court has twice denied efforts to challenge the Biden administration program—saying the plaintiffs lacked standing in the case—the court now finds itself facing a new scenario: namely, a decision by a lower appeals court that the cancellation of federal borrowers' student debt potentially jeopardizes state-level lending programs in states like Nebraska, one of the leaders of the pending suit.

What comes next is now an open question.

The rising sun creeps across the US Supreme Court on November 8, 2022, in Washington, D.C. The Court is hearing a case today that challenges the legality of the Indian Child Welfare Act which prioritizes the placement of Native American children in foster care or adoption with relatives, other tribal members, or in other Native homes. Samuel Corum/Getty Images

The conservative majority on the Supreme Court has a clear bias toward the administrative state—in this case, the Biden Administration, and its decision to unilaterally suspend borrowers' federal student loan debts.

However, the administration has argued the ongoing COVID-19 emergency declaration in place gives it broad leeway to enact programs like student debt cancellation under the precedent established under the HEROES Act, which permitted myriad social spending programs (including the Biden administration's decision to pause student loan debt repayments) to offset the economic fallout of the pandemic.

So far, several lower courts have agreed with them. And, to this point, the actual merits of the case—whether the student debt plan challenges state sovereignty—have not yet been broached in a court of law, leaving room for the Supreme Court to decide whether states' base complaint is valid, or whether it should be thrown out.

How they might rule, however, is difficult to discern.

"It would be difficult to predict how the Justices would rule on something as tricky as standing, especially given that each of the relevant States presents different theories about how they are injured," Sheng Li, an attorney at the New Civil Liberties Alliance who authored an amicus brief challenging the debt relief program, wrote Newsweek in an email. "Justice Barret twice turned away (in Brown County and Garrison) requests for Supreme Court review of student-loan cases that were dismissed for lack of standing. In other words, her likely views on the merits of the student-loan cancellation policy did not affect her conclusion on the need for standing."

If the states do have standing, however, things could get interesting. While the federal government is still operating under an emergency declaration due to the COVID-19 pandemic, University of Alabama law professor Luke Herrine—who has written a book supporting the executive branch's authority to cancel student loan debt—suggested the court could potentially examine whether the country is still in an emergency, and, from there, evaluate whether the administration acted outside of its authority in canceling federal student loan debt without the consent of Congress.

In that question, Herrine said the federal government has some legs to stand on—though it could run into trouble up against the conservative members of the courts' principled opposition to the administrative state.

"[The federal government] has a very clear argument, and they've put forward evidence for it," Herrine said in an interview. "You might agree or disagree with it, but the bottom line is they said, 'Look, we have all this evidence that restarting payments increases default rates, and therefore people would be made worse off by pausing their payments in the middle of an emergency and restarting them without relieving some debt.'"

Li, however, says there is already clear precedent supporting overturning Biden's student loan debt cancellation plan under last term's West Virginia v. EPA case, which ruled the agency did not have the authority to unilaterally regulate carbon emissions by forcing existing power plants to transition from fuels like coal or natural gas to other, less noxious power sources.

"Assuming they find standing to exist, the six Justices in the majority of last term's West Virginia v. EPA decision (Justices Robert, Thomas, Alito, Gorsuch, Kavanaugh, and Barret) likely would conclude the debt-cancellation program violates the Constitution's separation of powers," Li wrote.

Some liberal justices, added Li, could also be swayed to overturn the Biden program over their previous decisions supporting Congress' authority over the budget.

"They may be joined by one or more Justices in the West Virginia minority because the debt-cancellation program involves the Executive Branch attempting to usurp Congress's 'power of the purse,' and thus presents a more serious separation-of-powers problem than the EPA's policy in the West Virginia case. Justice [Elena] Kagan has been willing to rule against federal agencies that flagrantly violate the separation of powers."

Notably, wrote Li, Kagan wrote the majority opinion in Lucia v. SEC, a 2018 decision that ruled administrative judges under the Securities and Exchange Commission should be appointed, rather than hired.