Lawyers for the Biden administration told the Supreme Court that it could cancel hundreds of billions of dollars in student debt because Congress had
Lawyers for the Biden administration told the Supreme Court that it could cancel hundreds of billions of dollars in student debt because Congress had given 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 Sept. 11 attacks gave the secretary of education the power to “waive or modify any statutory or regulatory provision” 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 that the coronavirus pandemic was a national emergency, and his administration invoked the HEROES Act to pause student loan repayment requirements and to suspend the accrual of interest.
The Biden administration followed suit. The payment pause has cost the government more than $100 billion, according to the Government Accountability Office.
Last year, the administration said it planned to switch gears, ending the repayment pause but forgiving $10,000 in debt for individuals earning less than $125,000 per year, or $250,000 per household, and $20,000 for those who received Pell grants for low-income families. The nonpartisan Congressional Budget Office has estimated the plan’s price tag at $400 billion.
The loan forgiveness program, the administration said, was meant to ensure that “borrowers are not in a worse position financially due to the pandemic with regard to their ability to repay their loans” when payment obligations resumed.
In a Supreme Court brief, the administration argued that “the plain language of the HEROES Act authorizes the plan.”
The brief added: “The secretary responded to the devastating economic consequences of the Covid-19 pandemic by granting targeted relief to borrowers at higher risk of delinquency and default due to the pandemic — specifically, by waiving and modifying certain provisions governing student loan cancellation and discharge. That relief falls squarely within the secretary’s express statutory authority.”
The six states challenging the plan took a different view, saying that the administration exceeded its legal authority. “Canceling hundreds of billions of dollars in student loans — through a decree that extends to nearly all borrowers — is a breathtaking assertion of power and a matter of great economic and political significance,” lawyers for the states wrote in their Supreme Court brief.
The 2003 law, they said, “does not authorize the program, much less with the clarity this court’s precedent requires.”
In the final ruling on Friday, Chief Justice John G. Roberts Jr. said the administration’s logic — that power to “waive or modify” loan terms allowed for debt cancellation — was a vast stretch, “in the same sense that the French Revolution ‘modified’ the status of the French nobility.”
www.nytimes.com