Do two student-loan borrowers have Article III standing to challenge the Department of Education's Student Loan Debt Relief Plan, and did the Department of Education act consistent with its statutory authority and applicable procedural requirements in adopting the Plan?
This case asks the Supreme Court to clarify whether two student-loan borrowers have Article III standing to challenge the Department of Education’s Student Loan Debt Relief Plan (“Plan”), and whether the Department of Education acted consistent with its statutory authority and applicable procedural requirements in adopting the Plan. The Department of Education argues that Brown lacks Article III standing to challenge the Plan, that the Plan is statutorily authorized under the HEROES Act, and that the Secretary of Education has the authority to waive or modify the relevant procedural requirements. On behalf of herself and a similarly situated individual, Myra Brown counters that she has Article III standing to challenge the Plan, the Department of Education lacks the statutory authority to adopt the Plan, and the Plan is procedurally defective. This case has significant implications for the viability of the Student Loan Debt Relief Plan and the scope of executive power.
Questions as Framed for the Court by the Parties
(1) Whether two student-loan borrowers have Article III standing to challenge the Department of Education's student-debt relief plan; and (2) whether the department's plan is statutorily authorized and was adopted in a procedurally proper manner.
On October 12, 2022, the Secretary of Education proposed the Student Loan Debt Relief Plan (“Plan”) under authority granted by the Higher Education Relief Opportunities for Students Act of 2003 (“HEROES Act”). Myra Brown, et al. v. U.S. Department of Education, et al. at 5. The Secretary specifically invoked a provision of the HEROES Act that provided for waiver authority—the authority to waive or modify student financial aid program provisions when there is a national emergency. Id. Because former President Donald Trump had declared the COVID-19 pandemic a national emergency in 2020, the Secretary determined the COVID-19 pandemic was a national emergency and exercised the waiver authority to create the Plan. Id.
The Plan was developed amidst a national discussion on easing student loan debt on Americans through political means. Id. at 2. In the past, Congress attempted, unsuccessfully, to introduce student loan-forgiveness programs through legislation. Id. The Trump Administration explored possibilities but concluded that the executive lacked authority to take action on student loan forgiveness. Id. at 3. The Biden Administration, on the other hand, determined that the Department of Education has the authority to do so. Id. The proposed Plan (1) extends a waiver of student loan interest and repayment through December 31, 2022; and (2) forgives up to $20,000 for qualifying borrowers who received a Pell Grant, or up to $10,000 for qualifying borrowers who did not receive a Pell Grant. Id. at 3 n. 9. To qualify, a borrower must (1) have individual income under $125,000, or $250,000 if married filing jointly; and (2) have Direct, Perkins, or Federal Family Education loans that are not commercially held. Id. at 5.
Myra Brown and Alexander Taylor sued the Department of Education in the United States District Court for the Northern District of Texas. Id. at 1. They both have student loans; however, Brown does not qualify for the Plan because her loans are commercially held, and Taylor can only receive $10,000 of debt forgiveness because he did not receive a Pell Grant. Id. at 5. Disagreeing with the Plan’s eligibility criteria, Brown and Taylor alleged that (1) the Secretary’s Plan violates the Administrative Procedure Act (“APA”) and the Higher Education Act’s (“HEA”) notice-and-comment requirements; and (2) the HEROES Act does not grant the Secretary the authority to implement the Plan. Id. at 6. Brown and Taylor also moved to enjoin the Department of Education from implementing the Plan. Id.
The Department of Education moved to dismiss the case for lack of jurisdiction, arguing that Brown and Taylor lack standing. Id. The Department of Education also opposed Brown and Taylor’s motion for a preliminary injunction. Id. The district court converted the preliminary injunction motion into a motion for summary judgment. Id. at 10. The district court granted summary judgment for Brown and Taylor, declared the Plan unlawful, and vacated it. Id. at 26.
On November 10, 2022, the Department of Education appealed and filed a motion for a stay of the judgment pending appeal with the United States Court of Appeals for the Fifth Circuit. Joint Appendix at 300. The Fifth Circuit denied the motion for a stay pending appeal. Id. at 308. On December 2, 2022, the Solicitor General submitted an application to stay the district court’s judgment. Application for a Stay, Submitted to Justice Alito at 39. The application for a stay was treated as a petition for a writ of certiorari before judgment, which the United States Supreme Court granted on December 12, 2022.
ARTICLE III STANDING
Petitioners Department of Education and Miguel Cardona (collectively “Department of Education”) contend that Respondents Myra Brown and Alexander Tayler (collectively “Brown”) lack standing. Brief for Petitioners, Department of Education et al. at 31. The Department of Education argues that Brown’s injury allegation does not meet the Article III requirement, namely, that the claimant’s alleged injury must be redressable. Id. at 23. The Department of Education points out that Myra Brown’s position would not change even if the Plan were vacated, and Alexander Taylor’s financial position would be worse off. Id. at 31–32. In addition, the Department of Education adds that Brown lacks standing with regard to the APA procedural claim. Id. at 32. The Department of Education emphasizes that Brown recognizes that waivers and modifications under the HEROES Act are exempt from notice-and-comment procedures, but nonetheless argues that exemption is inapplicable in this case because the Department of Education lacks substantive authority to implement the Plan. Id. The Department of Education notes that, if this argument is accepted, no borrowers would be able to have their loan forgiven, and therefore the injury is by nature unredressable. Id. Further, this theory would preclude the Secretary from reconsidering the Plan under the HEROES Act, indicating that Brown’s argument is not an “actual desire” to receive a remedy but rather a desire to enforce “[her] view of the law.” Id. at 32–33.
Brown counters that the standing requirement should be less stringent in this case because a procedural right to protect concrete interests was violated. Brief for Respondents, Myra Brown et al. at 22. Brown explains that “some possibility” that the Plan will be reconsidered is the proper standard. Id. at 22, 25. Brown maintains that all three requirements of standing are satisfied. Id. at 27. First, Brown argues that the lack of legal entitlement does not negate concrete interests, just like applicants for a license can sue to enforce a procedural requirement even though they have no legal entitlement to the license. Id. at 27. Second, Brown states that the injuries are traceable to the Plan because the eligibility requirements prevented Brown from receiving loan relief. Id. at 28. Third, Brown argues that the injuries are redressable because there is “some possibility” that the court may vacate the Plan. Id. at 28–29. Brown states that whether the government could provide student loan relief under the HEROES Act is not the issue. Id. at 29. Rather, Brown explains that the injuries are redressable because the Secretary could reconsider the eligibility requirement and extend relief to Brown. Id.
INTERPRETATION OF THE HEROES ACT
The Department of Education argues that the Plan is authorized under the HEROES Act. Brief for Petitioners at 34. In particular, the Department of Education points out that the COVID-19 pandemic is a national emergency, the Plan covers the affected disaster area, and the borrowers eligible for debt forgiveness are the affected individuals. Id. at 35, 42. The Department of Education also highlights that the evidence and analysis support that debt forgiveness for low-income households is necessary because they are at a higher risk of default and delinquency. Id. 35, 43. The Department of Education argues that there is no need to prove that the emergency directly caused economic hardship. Id. at 45. Additionally, the Department of Education contends that, under Title IV of the Act, the provisions governing debt forgiveness apply to student financial assistance programs. Id. at 36. The Department of Education also emphasizes that the HEROES Act gives the Secretary substantial discretion to determine appropriate relief by authorizing the Secretary to do what the Secretary “deems” necessary rather than what is in fact necessary. Id. at 36–37.
Brown emphasizes that, but for the HEROES Act, the HEA and the APA require negotiated rulemaking and notice-and-comment procedures before adopting the Plan. Brief for Respondents at 34–35. Brown claims that the HEROES Act does not excuse the Department of Education from such procedures. Id. at 35–36. Brown specifies that the negotiated-rulemaking requirements apply because the Plan is a “regulation” under the HEA. Id. at 36–37. Brown further points out that an agency must show an express carve-out exception to avoid notice-and-comment requirements. Id. at 37. Brown argues that such an exception under the HEROES Act only applies to authorized modifications, and the Secretary has no discretion to determine what a modification is. Id. at 37–39. Brown emphasizes that the Department of Education’s interpretation of the HEROES Act gives the Secretary too much authority. Id. at 39. Brown further contends that the Secretary cannot avoid the procedural requirement by relabeling it as a modification under the HEROES Act. Id. at 39.
APPLICABILITY OF THE MAJOR QUESTIONS DOCTRINE
The Department of Education claims that the major questions doctrine, which holds that courts should not defer to an agency’s statutory interpretation on questions involving great economic, policy, or political significance, does not apply in this case. Brief for Petitioners at 46. The Department of Education explains that this Court typically applies the usual rules of statutory interpretation rather than the major questions doctrine to review economically and politically important executive actions. Id. at 46–47. According to the Department of Education, the major questions doctrine only applies in extraordinary circumstances where an agency claims expansive authority based on “modest words” or “vague terms,” which is not the case here. Id. at 47–48. Rather, the Department of Education points out that the HEROES Act grants the Secretary direct and concrete authority to provide student loan relief in national emergencies. Id. at 50. Furthermore, the Department of Education explains that every case where the Court applied the major questions doctrine involved regulatory power, but this case only involves a government-benefit program. Id. at 48–49. The Department of Education further posits that the cost of a government program alone does not mean that plain statutory meaning can be ignored. Id. at 47.
The Department of Education further highlights that the Secretary’s authority only applies to limited circumstances, for a limited class, and for limited objectives with specific measures. Brief for Petitioners at 50. The Department of Education further maintains that even if the Court applies the major questions doctrine, the Plan is constitutional. Id. at 53. The Department of Education argues that the HEROES Act unambiguously authorizes the Secretary to “waive or modify any statutory or regulatory provision,” which complies with the doctrine’s requirement. Id. at 55. The Department of Education asserts that the Secretary has the authority to determine the scope of borrowers and the relief of the amount that is necessary to achieve the purpose of the HEROES Act, which are not fundamental questions that the major questions doctrine safeguards. Id. at 56.
Brown counters that the major questions doctrine applies in this case. Brief for Respondents at 41. Brown argues that because the Plan proposes to cancel debts of 40 million borrowers amounting to $400 billion, it has significant economic and political impact and thus satisfies one of the requirements of the major questions doctrine. Id. at 41–42. Brown also points out that, while loan forgiveness is highly controversial, the HEROES Act was never controversial because Congress intended to limit the scope of the Act to active-duty military. Id. at 42–43. In addition, Brown asserts that Congress did not give the Secretary authority to approve the Plan because Congress never explicitly authorized it. Id. at 44. Brown points out that the scale and the impact of the action are unprecedented. Id. at 45. In opposition to the Department of Education’s argument that the Secretary has the authority to determine the scope of borrowers and the amount of the forgivable debt, Brown argues that this authority is too broad. Id. at 46. Brown also argues that neither the HEROES Act’s text nor its legislative history authorizes the Secretary to cancel student-loan debts. Id. at 47.
In addition, Brown posits that the Plan cannot be justified under the waiver authority, as the Secretary never waived any provision to approve the Plan. Id. at 48. Brown asserts that the Plan makes fundamental changes in the statutory scheme by modifying provisions, which the Secretary is without power to do. Id. at 48-49. Additionally, Brown asserts that the Plan exceeds statutory authority because the HEROES Act only allows waivers to protect borrowers from being placed in a worse position, and the proposed Plan places borrowers in “a far better position.” Id. at 51. Brown also maintains that the pandemic is not the cause of the borrowers’ difficulties, and they need loan forgiveness regardless of the national emergency. Id. at 53. Brown criticizes the Plan for being grossly over-inclusive; for example, it even includes nine million individuals living abroad during the pandemic who are not residing in a “disaster area.” Id. at 54-55.
IMPACT ON WORKING-CLASS AMERICANS AND MINORITIES
Borrower Advocacy and Legal Aid Organizations (“Organizations”), in support of the Department of Education, argue that upholding the Plan is critical for working-class Americans. Brief of Amici Curiae Borrower Advocacy and Legal Aid Organizations, in support of Petitioners at 24–25. The Organizations highlight that many borrowers are at risk of default or delinquency because of poor student loan servicing practices, false promises from certain higher education institutions, and the economic, personal, and health effects of COVID-19. Id. at 13, 18–22. The Lawyers’ Committee for Civil Rights Under Law and 21 other organizations (collectively “Lawyers for Civil Rights”), also in support of the Department of Education, add that the Plan is necessary for Black and Latinx borrowers who are at particular risk of default and delinquency. Brief of Amici Curiae The Lawyers’ Committee for Civil Rights Under Law and 21 Other Organizations, in support of Petitioners at 21–22. Lawyers for Civil Rights underscore that the COVID-19 pandemic has taken a disproportionate toll upon Black and Latinx communities and deepened the pre-existing racial wealth gap. Id. at 12–13, 15–17. Lawyers for Civil Rights conclude that the Plan will significantly aid Black and Latinx borrowers, completely relieving nearly half of Latinx borrowers and more than a quarter of Black borrowers. Id. at 10–11.
The Cato Institute and Manhattan Institute (“Institutes”), in support of Brown, counter that the Plan would unduly burden working-class American taxpayers who do not have a bachelor’s degree. Brief of Amici Curiae The Cato Institute and Manhattan Institute, in support of Respondents at 21–22. The Institutes estimate that the Plan will cost taxpayers between $300 billion and $500 billion. Id. The Institutes reason that it is improper to burden Americans who have not attended college with the cost of student loan cancellation for borrowers who possess college degrees that provide them with higher earning potential and job security. Id. at 20–21. The America First Policy Institute (“AFPI”), also in support of Brown, comments that student loan cancellation will only make higher education more expensive for future working-class Americans by perpetuating a student loan system that already incentivizes colleges to raise tuition and spend wastefully. Brief of Amicus Curiae America First Policy Institute, in support of Respondents at 11, 13. AFPI emphasizes that higher education institutions do so because student loans are easily obtained and there is no mechanism to hold schools accountable for excessive spending. Id. at 9–10, 13–14.
THE LIMITS OF EXECUTIVE POWER
Legal Scholars, in support of the Department of Education, maintain that the Plan is a proper exercise of executive power under the HEROES Act. Brief of Amici Curiae Legal Scholars, in support of Petitioners at 13. Legal Scholars remark that the size and features of the Plan are consistent with past exercises of executive power, citing measures taken by the executive branch during the COVID-19 pandemic and other emergencies. Id. at 16–18. Legal Scholars add that the Plan does not expand the Department of Education’s regulatory authority. Id. at 19. Massachusetts, the District of Columbia, and 20 other states (collectively “Massachusetts”), also in support of the Department of Education, agree that Congress, through the HEROES Act, provided the Secretary of Education with the authority to implement the Plan. Brief of Amici Curiae Massachusetts et al., in support of Petitioners at 22. Massachusetts asserts that the Secretary properly invoked and acted within the authority of the executive branch. Id. at 27.
The Protect Democracy Project, in support of Brown, counters that the Plan allows the executive branch to encroach upon legislative power reserved to Congress, namely the spending power. Brief of Amicus Curiae The Protect Democracy Project, in support of Respondents at 22. The Protect Democracy Project states that the Plan exceeds the executive branch’s emergency powers, which allows the executive to act beyond its traditional authority to address a danger that normal channels could not address, and the authority granted by Congress via the HEROES Act. Id. at 23. Senator Marsha Blackburn and 42 other members of the United States Senate (collectively “Senators”), also in support of Brown, agree that the Plan exceeds the executive branch’s authority and is the type of major policy decision that Congress should make. Brief of Amici Curiae Senator Marsha Blackburn et al., in support of Respondents at 11. Senators elaborate that the executive branch’s encroachment on Congress’s exclusive power to control the federal government’s spending is a failure of the Executive Branch’s constitutional responsibility to faithfully execute the laws. Id. at 25.
- Andrew Chung, U.S. Supreme Court Takes Up Second Biden Appeal in Student Debt Plan Fight, Reuters (Dec. 12, 2022).
- Nina Totenberg, Supreme Court Will Hear Challenge to Biden’s Student Debt-Relief Program, NPR (Dec. 1, 2022).