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The plan ‘grossly exceeds’ the authority of the Heroes Act
The six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — argue in their brief that the Biden administration exceeded its authority by moving to cancel up to $20,000 in student debt for tens of millions of Americans without the authorization of Congress.
The Biden administration insists it is acting within the law, pointing out that the Heroes Act of 2003 gives the US education secretary the authority to make changes to the federal system of ‘ student loans during national emergencies (the United States has been operating under a declaration of emergency since March 2020 due to the Covid pandemic). The law is a product of the 9/11 terrorist attacks, and an earlier version of it provided relief to federal student loan borrowers affected by the attacks.
However, the states counter that the Heroes Act only allows the secretary of education to modify the federal student loan system to keep certain borrowers from being worse off with their loans because national emergency.
They go on to say, in their brief, that the president’s plan “puts about 43 million Americans in a better position by eliminating all loan balances for 20 million and writing off up to $20,000 for more than 20 million more. This greatly exceeds the authority of the Secretary under the Act.”
In other words, said higher education expert Mark Kantrowitz, the states are asserting that Biden is using Covid as an excuse to pass his plan.
“For example, if it was an emergency, why wait three years to provide the pardon?” he said. “Why do I present it in a political framework, as fulfilling a campaign promise?”
The states also argue that Biden’s plan will cause financial damage to their states, including loss of profits for companies that service federal student loans.
Borrowers denied ‘procedural rights’
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The second legal challenge the Supreme Court will consider was supported by the Job Creators Network Foundation, a conservative advocacy organization.
In its brief, the attorneys argue that two plaintiffs, Myra Brown and Alexander Taylor, were denied their “procedural rights” by the Biden administration because it did not allow the public to formally weigh in on the shape of its plan to ‘ student loan forgiveness. before it came out. As a result, the attorneys argue, Brown and Taylor are either partially or completely excluded from the exemption.
The Heroes Act exempts the need for a notice and comment period during national emergencies, but, like the states, the plaintiffs in this challenge also argue that that law does not authorize the plan to ‘ sweep of the president.
How the White House defends loan forgiveness
In its arguments to the top court filed last month, lawyers for the US Department of Education and Justice Department argued that challenges to the plan were brought by parties that failed to show harm from the policy, which is typically a requirement to establish a so-called legal position.
The lawyers also rejected the claim that the Biden administration was overstepping its authority, expressing the White House’s argument that it is acting within the law under the Heroes Act of 2003.
“We remain confident in our legal authority to adopt this program that will ensure that the financial damage caused by the pandemic does not lead borrowers into delinquency and default,” said the US Secretary of Education. Miguel Cardona in a statement.
The Supreme Court will start hearing the cases on February 28.
