Biden administration lawyers have told the Supreme Court it could cancel hundreds of billions of dollars in student debt because Congress gave it that authority in the Higher Education Relief Opportunities for Students Act of 2003, which is usually called the HEROES Act.
A version of the law enacted in 2001 after the 9/11 attacks gave the education secretary the power to « waiver or amend any statutory or regulatory provisions » to protect borrowers affected by terrorist attacks.
In 2003, Congress expanded that power to include borrowers affected by « a war or other military operation or national emergency. » In March 2020, President Donald J. Trump declared the coronavirus pandemic a national emergency, and his administration invoked the HEROES Act to suspend student loan repayment requirements and suspend interest accruals.
The Biden administration followed suit. The suspension of payments has cost the government more than $100 billion, according to the Government Accountability Office.
Last year, the administration he said he intended to shift gears, ending the repayment pause but forgiving $10,000 of debt for people earning less than $125,000 a year, or $250,000 per household and $20,000 for those receiving Pell grants for low-income families. The nonpartisan Congressional Budget Office has estimated the plan’s price at $400 billion.
The loan forgiveness program, the administration saidit was intended to ensure that « borrowers were not in a worse financial position due to the pandemic with regards to their ability to repay their loans » when they resume payment obligations.
In a Supreme Court note, the administration argued that « the plain language of the HEROES Act empowers the plan. »
The brief added: “The secretary has responded to the devastating economic consequences of the Covid-19 pandemic by granting targeted relief to borrowers at increased risk of default and insolvency due to the pandemic, in particular by waiving and amending certain provisions governing the cancellation of loans to students and discharge. Such relief falls squarely within the express statutory authority of the secretary.
The six states that contested the plan took a different view, saying the administration exceeded its legal authority. « The cancellation of hundreds of billions of dollars in student loans – through a decree that extends to almost all borrowers – is a breathtaking statement of power and a matter of great economic and political significance, » wrote the lawyers of the been in their Supreme Court brief.
The 2003 law, they said, « does not authorize the program, much less with the clarity required by this court’s precedent. »
In Friday’s final ruling, Chief Justice John G. Roberts Jr. said the administration’s rationale — that the power to « waiver or change » the terms of the loan allowed for debt relief — was a major stretch. « in the same sense in which the French Revolution ‘modified’ the status of the French nobility.