Wither Student Debt Cancellation? Conservative Justices Showed Deter...

03/01/23

[by Dalié Jiménez and Jonathan Glater]

Yesterday, the Supreme Court heard two cases challenging the constitutionality of the Biden administration’s plan for student debt cancellation. Suing to block the plan are a group of states that argue they will lose revenue if student debt is canceled and two borrowers who claim they should have access to more cancellation than they would receive but are asking the Court to prevent the cancellation plan altogether. 

The cases present two fundamental questions. First, the justices must determine whether the plaintiffs have “standing” to sue: have they established that they will suffer a concrete and particularized injury that is caused by the cancellation plan and which can be redressed by preventing cancellation. Second–and only if the answer to the first question is yes–the justices must assess whether the administration has the statutory authority to cancel student debt.  Listening to the arguments, one message was clear: the conservative justices want to reach the merits of the case but understand the difficulties the Court's standing jurisprudence (primarily a feature of conservative justices) poses.

At stake is a signature initiative by the administration, which means that for conservatives on the Court, the cases offer a chance to deal a partisan setback to the president.  And in the long battle waged by conservative justices to weaken executive agencies, these cases also provide a chance to undermine federal agencies more generally.  These justices clearly recognize the opportunity to achieve multiple goals here.

The oral arguments focused roughly equally on the two questions, but even the conservative justices seemed to have difficulty agreeing with the plaintiffs on the question of standing. This is not that surprising, because neither case features a plaintiff who has clearly suffered an injury that would be cognizable under the Court’s well-established doctrine governing who can sue whom for what and when.  

In fact, some of the possible theories of standing asserted by the plaintiffs in lower court proceedings received hardly any airtime at all during the arguments.  The justices focused on the potential, indirect injury to the state of Missouri if debt cancellation reduces revenue earned by a state-created corporation, MOHELA, which services federal student loans as an Education Department contractor. That reduction in revenue could mean that MOHELA pays less money to the state at some future date–a harm that is pretty speculative and uncertain, rather than concrete and particularized.

The conservative justices know that if they allow these plaintiffs to proceed, they may open the door to future plaintiffs whose claims to harm are as thin and attenuated. A future Republican administration, for example, would face litigation risk from parties who currently would not be able to mount a viable legal challenge. That seems a pretty likely scenario and would force the justices either to allow the suit to proceed, which they will not want to do, or to erode their institutional credibility further by coming up with a way of distinguishing that future case from those of today.

Without resolving the matter of standing, the Court cannot move forward to where they clearly want to go: a holding that would permanently stop the plan to cancel student debt and weaken the executive agencies fundamental to the modern administrative state. And while the oral argument did not clearly reveal the doctrinal basis for the justices aversion to the Biden cancellation plan, their questions did make clear just how hostile members of that conservative wing are to the idea of cancellation.  

All of which is bad news for the 40 million-plus borrowers whose financial futures will be affected by what the Court decides, a reality that Attorney General Prelogar and Justice Sotomayor both took time to highlight but that seemed of little import to the conservative justices. They were more concerned about the “unfairness” of the administration’s focused cancellation program for those who already paid off their loans or didn’t take out loans in the first place.  

It will not bolster the legitimacy of the Court if the conservative majority votes to block this limited cancellation initiative because only forgiveness for all borrowers of all time would be fair, while asserting that cancellation is beyond the authority of the administration anyway.  

 

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