Last year, the U.S. Supreme Court invalidated President Joe Biden’s program of student debt forgiveness. In Biden v. Nebraska the Court’s six Republican appointees granted standing to a state-created loan-processing corporation in Missouri that goes by the acronym MOHELA. Those same Justices then ruled that the statute the administration invoked—which goes by the acronym the HEROES Act—did not authorize the program. All three Democratic appointees dissented on both grounds.
The Biden administration did not give up. Instead, it invoked different statutory authorities to create a new student debt forgiveness plan, known by the acronym SAVE. Once again, Republican-led states sued, and last week, once again, Republican-appointed jurists found that MOHELA had standing and that the Biden administration had asserted power that Congress had not delegated to it. This time the blow came from a three-judge panel of the U.S. Court of Appeals for the Eighth Circuit consisting of an appointee of former President George W. Bush and two appointees of former President Donald Trump.
As a technical matter, last week’s Eighth Circuit decision in Missouri v. Biden only granted interim relief from a federal district court order that partially blocked but partially allowed SAVE to go into effect. As a practical matter, however, it means that no substantial student debt forgiveness program will operate during the duration of the Biden administration or, should Vice President Kamala Harris become President in January, during her administration either—at least not without new legislation.
The Eighth Circuit Leverages the Roberts Court’s Assault on the Administrative State
The Eighth Circuit found that MOHELA has standing because the Supreme Court did. That’s fair enough, but why did it find that the state plaintiffs were likely to succeed on the merits, given that SAVE relied on different statutory authority than the program invalidated by the Supreme Court last year relied?
The Eighth Circuit held that the primary statute the administration invoked to support SAVE—which allows for borrowers to take advantage of “an income contingent repayment plan, with varying annual repayment amounts based on the income of the borrower, paid over an extended period of time prescribed by the Secretary” of Education—is best read not to authorize the effective zeroing out of principal and interest payments, given that other parts of the same statute expressly authorize loan forgiveness in specific contexts.
That’s a plausible reading, to be sure, but it is not the only plausible reading of the statute. If the case had been decided at almost any time in the last 40 years, under the so-called Chevron deference doctrine, the Eighth Circuit might have been required to defer to the Department of Education’s reasonable interpretation of a statute it is charged with administering. But the court did not have to worry about the issue at all, because on June 28 of this year the Court—in another ideologically divided 6-3 decision—overruled the Chevron deference doctrine.
Meanwhile, the Eighth Circuit expressly invoked a different principle that the Roberts Court has fashioned to hamstring effective regulation. Under the “major questions doctrine,” an agency needs very clear statutory authorization from Congress in order to take actions of major “economic and political significance.” Although the major questions doctrine has antecedents in older cases, in recent years, the Court has repeatedly invoked and inflated it, including in its 2023 decision invalidating the earlier student debt forgiveness program. Because the kinds of regulation that give rise to litigation will typically involve billions of dollars, it is hard to identify any regulation that finds its way into court that cannot be said to involve a major question, thus licensing judges and Justices who are hostile to regulation to say that Congress did not speak sufficiently clearly to grant the power the agency in question has asserted.
Next Steps
What comes next? The Biden administration could appeal the Eighth Circuit decision to the Supreme Court. However, the Court might choose not to intervene, and even if it did, it is highly unlikely that it would rule before the end of President Biden’s term. If Trump becomes President again, he will surely terminate SAVE. If Harris becomes President, she could continue such an appeal, but to what end? The Court is very unlikely to reverse the Eighth Circuit. Whatever else one might say about the Eighth Circuit’s ruling, it is faithful to the approach taken by the SCOTUS conservative super-majority.
New legislation from Congress could either directly grant student debt relief or very clearly authorize the Department of Education to grant such relief. For that to happen would require Harris to take office as President and Democrats to win both houses of Congress. Even then, without changing the filibuster rule, there would be little chance of a major student debt forgiveness package passing.
Indeed, it is possible to imagine even some Democrats voting against student debt forgiveness. The Biden administration has been careful to tailor its debt relief programs to those with the greatest economic need. But even so, there are legitimate reasons why progressives might oppose student debt forgiveness. People who paid out of pocket for college but are not making much money and others who never went to college can claim that they are equally if not more entitled to financial assistance. And student debt forgiveness without any attempt to address the cost of higher education is at best a temporary fix to a systemic problem.
Those are policy questions. The Supreme Court and Eighth Circuit decisions invalidating the Biden efforts to provide student debt forgiveness purport to be rooted in law—in the parsing of the statutes Congress enacted delegating power to the Department of Education. Given the ideological breakdown on these matters, however, it is nearly impossible to avoid the conclusion that the drivers of the decisionmaking by the Republican appointees to the federal bench are some combination of hostility to student debt forgiveness and hostility to the exercise of power by administrative agencies more broadly.
In the wake of last week’s Eighth Circuit ruling, people struggling to buy a home or even to make ends meet because of substantial student debt will no doubt be angry. It would be a shame if they direct that anger at the Biden/Harris administration, because the true culprit is the Republican-packed judiciary.
