As President Joe Biden looks to revive a key campaign promise to provide widespread debt relief to student-loan borrowers, legal experts warn that he's likely to encounter a fresh wave of lawsuits challenging his authority to act without congressional approval.
Hours after the U.S. Supreme Court axed Biden's initial attempt at debt forgiveness on June 30, the president announced a new plan that he said is "legally sound" and is the best option remaining to deliver sweeping relief to millions of borrowers as quickly as possible.
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But even in a best-case scenario, the new plan can't be rolled out until long after October, when loan payments are due to resume after a three-year pause. And it could still be vulnerable to legal attacks targeting executive powers, as it relies on the authority of the Higher Education Act, which governs financial assistance in post-secondary schooling.
"I have no doubt that any relief under the Higher Education Act will face a spate of lawsuits, essentially pitching the same claim — that the administration acted outside of its statutory authority," said Steven Schwinn, a professor at the University of Illinois John Marshall Law School in Chicago.
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The high court ruled that the administration overstepped its authority by authorizing such a broad, costly program under a 2003 law that gives the Education Secretary special powers over loans when responding to national emergencies. The court held that the law — called the Heroes Act — does not allow for such drastic action, despite the unprecedented nature of the pandemic.
"The question here is not whether something should be done; it is who has the authority to do it," Chief Justice John Roberts wrote for the court, concluding those powers rest with Congress.
Roberts also offered a hint at how the high court might rule if a plan based on the Higher Education Act lands back on justices' desks. He wrote in the majority opinion that the act could only be used to cancel or reduce loans under "limited circumstances," specifically for public servants, bankrupt borrowers, people who've become severely disabled or those defrauded by their institution.
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Although the court's ruling was based on the Heroes Act, the opinion signaled implicitly that the language in the Higher Education Act would not be considered as a valid basis for the scope of student-debt relief Biden initially sought, according to Jed Shugerman, a professor at Boston University School of Law.
"It wrote this decision in a way that is meant to preview for federal courts, both the Roberts' Court or lower courts, the same reasoning that would strike down the waiver based on the Higher Education Act," Shugerman said.
"The Roberts' court point was: Don't try this again," he said.
The Higher Education Act includes a provision that allows the secretary of education to "compromise, waive, or release any right, title, claim lien, or demand, however acquired, including any equity or any right of redemption." Some Democrats like Elizabeth Warren have urged the administration to use this act to pursue forgiveness, rather than the Heroes Act — the authority that Biden used to pursue his initial relief program.
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Education Secretary Miguel Cardona said the regulatory process for the Heroes Act was much quicker, given the law does not require a comment period. The White House was able to announce and initiate applications for its original student-debt relief plan in a matter of weeks last year, just months before a consequential midterm election.
Biden warned that his new proposal will take longer to authorize, but the administrative proceedings have been initiated. The Department of Education will hold a public hearing on the matter on July 18, according to a notice.
It will take at least a year for the administration to go through those required procedures, meaning a final rule would not be announced until the fall of 2024 — shortly before the presidential election.
Once announced, legal experts expect challenges to ensnare the program, again.
Schwinn said the Higher Education Act seems to provide more flexibility to the Biden administration than the Heroes Act to authorize debt forgiveness. But he also said recent rulings from the Supreme Court curtailing federal authority signal that "the administration will face strong headwinds in defending any relief under any authority that doesn't explicitly say that the administration can grant federal student loan forgiveness."
Biden would have to be re-elected in order to orchestrate a sustained legal defense of the plan, potentially thrusting the issue back into the spotlight in the heat of the campaign season.
"The easier thing for Biden to do is win re-election," Shugerman said. "The harder thing is to get the courts to then approve this."
Shane Wu, a former federal prosecutor who served in the Clinton administration, says the newest members of the conservative majority, including Justices Amy Coney Barrett and Neil Gorsuch, have demonstrated a trend of restricting the authority of federal agencies in recent rulings.
Whether the administration's new plan will stand up to court challenges will ultimately depend on how they approach it, says Wu. The White House has yet to release details about eligibility or the amount of debt cancellation in their new program, only saying they aim to reach "as many working and middle-class borrowers as possible."
"The idea of whether it's simply legal or illegal really just depends on what the arguments are," said Wu.
Santiago Mayer, who leads progressive Gen-Z group Voters of Tomorrow, is among advocates who want Biden to pursue student-debt forgiveness by any means necessary.
"I want to choose to believe that if 'plan B' gets stricken down, we're gonna move to plan C," he said. "This is legal, it is the right thing to do, it is appropriate to the circumstances that we're in and it is a promise that was made."
