Law & Courts

Supreme Court Will Decide Fate of Student Loan Relief: What Teachers Need to Know

By Mark Walsh — February 28, 2023 6 min read
Student debt relief advocates gather outside the U.S. Supreme Court in Washington on Feb. 28, 2023, as the court heard arguments over President Joe Biden's student debt relief plan.
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The U.S. Supreme Court on Tuesday heard more than three hours of oral arguments about President Joe Biden’s $400 billion student loan debt relief plan, which remains on hold—a major test of executive branch power watched by millions of teachers carrying high student debt, and many who qualify for relief under the program.

“Nearly half of educators have outstanding student loan debt, owing, on average, $58,700,” the National Education Association said in a friend-of-the-court brief supporting the loan relief plan. “The financial challenges faced by these educators compared to their peers accelerated during the pandemic, but debt relief now would place many educators on more solid financial footing.”

The American Federation of Teachers, in its own brief supporting the Biden plan, cited a similar figure for the amount the average teacher owes and said such balances, coupled with the pandemic, have made it difficult for school districts to retain teachers.

“Student debt relief will help remediate the crushing impact of COVID-19 on teachers, who must amass substantial debt to enter their profession and who often work at low wages,” the AFT brief said. “The prerequisites to become a teacher, which include both higher education and licensing requirements, leave the average teacher with an outstanding student loan debt balance of $58,500, with 1 in 8 owing more than $105,000.”

A range of views about the merits of the program

Several of the court’s more conservative members sounded skeptical of the legality of the plan, which was announced in August 2022 by Biden and U.S. Secretary of Education Miguel Cardona and involves 43 million loans held by the federal Department of Education.

“We’re talking about half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of ‘modifying’” federal higher education laws and rules, Chief Justice John G. Roberts Jr. said.

Justice Samuel A. Alito Jr. wondered whether such a large relief program was “the sort of thing that Congress is likely to address expressly.”

Justice Brett M. Kavanaugh said the assertion of executive authority with the program struck him as something “I think we’ve seen before, an old statute with kind of general language, Congress specifically considering the present issue repeatedly but not … passing legislation that would authorize the specific action and then, in the wake of Congress not authorizing the action, the executive, nonetheless, doing a massive new program.”

But the court’s more liberal members seemed supportive of the program.

Justice Elena Kagan said it was clear that Congress had authorized broad authority for the U.S. secretary of education to modify loan debt during a national emergency, under the Higher Education Relief Opportunities for Students Act of 2003, or HEROES Act.

“We deal with congressional statutes every day that are really confusing,” Kagan said. “This one is not.”

Justice Sonia Sotomayor, referring to arguments by some challengers about the unfairness of the program, said she understood one of the Biden administration’s responses to be, “everybody suffered in the pandemic, but different people got different benefits because they qualified under different programs.”

“There’s inherent unfairness in society because we’re not a society of unlimited resources,” Sotomayor said. “Every law has people who encompass it or people outside it.”

As much as $20,000 in relief for some borrowers

When the COVID-19 pandemic hit in early 2020, then-Secretary of Education Betsy DeVos invoked the HEROES Act to pause repayment obligations and interest accrual on all Education Department-held loans. The statute gives the secretary such power to act under a “national emergency,” such as a terrorist act, a war, or a pandemic.

Cardona determined last year that the across-the-board pause should end, but that repayment obligations for lower-income borrowers would put them at risk of default.

The Biden plan issued up to $10,000 in student-loan relief to eligible borrowers with a federal adjusted gross income below $125,000, or $250,000 for borrowers filing jointly. Recipients of federal Pell Grant recipients could receive up to $20,000 in relief because they were considered to have fewer resources and be at substantially greater risk of default.

Biden had discussed a program of student debt relief from the time he was a 2020 candidate for president, though even he expressed doubts he could do it by executive authority. Then-Speaker of the House Nancy Pelosi, D-Calif., said in 2021 that the president “does not have that power. It has to be an act of Congress.”

The debt relief plan was immediately challenged in multiple lawsuits. Two have come before the Supreme Court. Six states—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—claimed the program violated the executive branch’s authority. They lost on standing grounds in a federal district court. But the U.S. Court of Appeals for the 8th Circuit, in St. Louis, reinstated the case on the theory that a Missouri state loan-servicing agency would lose revenue if many of its accounts were wiped out by the debt-relief plan, and thus Missouri would suffer the kind of concrete injury necessary to provide it with legal standing.

The appeals court also upheld a nationwide injunction blocking the program, although it did not specifically rule on the merits. That case in the high court is Biden v. Nebraska (No. 22-506).

The second case involves two Texas individuals, one who did not qualify for relief and the other who qualified only for the first $10,000 because he had not been eligible for a Pell Grant while in college. A federal district court held that the program was substantively unlawful, and it also blocked it nationwide. The U.S. Court of Appeals for the 5th Circuit, in New Orleans, declined to delay the district court ruling. The administration appealed those rulings in Department of Education v. Brown (No. 22-535).

One former education secretary takes in the arguments

A friend-of-the-court brief filed in support of the challengers by 43 U.S. senators, including several Republican members of the Senate education committee, argues that the Biden administration’s “unilateral action was patently unlawful.”

“The president is not a king, and he has no power to dispense with the lawful acts of the legislature,” the brief says.

A brief on behalf of DeVos, who was in the courtroom on Tuesday, also supported the challengers. She had explored student debt relief “on a mass basis” but “concluded that the Executive Branch did not have the authority to offer blanket cancellation of student loans,” the brief said.

Four other former GOP education secretaries joined that brief—Margaret Spellings and Roderick Paige (President George W. Bush), Lamar Alexander (President George H.W. Bush), and William J. Bennett (President Ronald Reagan).

Nebraska Solicitor General James A. Campbell, representing the six states in the Biden v. Nebraska case, said: “The secretary here asserts a breathtaking power, to do anything that he thinks might reduce the risk of borrowers defaulting, even years after a national emergency arises. He needs clear congressional authorization for such power. But he doesn’t have it here because the HEROES Act does not authorize this program.”

U.S. Solicitor General Elizabeth B. Prelogar told the justices that both DeVos and Cardona had invoked the HEROES Act to head off immediate harm for student-loan borrowers because of the pandemic.

“But, if that forbearance ends without further relief, it’s undisputed that defaults and delinquencies will surge above pre-pandemic levels,” Prelogar said. “So Secretary Cardona again invoked the HEROES Act to provide a measure of loan forgiveness to ensure that this unprecedented pandemic does not leave borrowers worse off in relation to their student loans.”

A decision is expected by late June.

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