The Open-And-Shut Case In Favor Of Student Loan Debt Relief

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Amber Saddler, Guest Contributor


CREDIT: Shutterstock/Ben Von Klemperer

Tomorrow, opponents of President Biden’s student loan debt relief plan will submit their arguments against the administration’s overhaul of a long-broken, predatory, and abusive student loan system to the U.S. Supreme Court. Their inevitable attempt to keep the rich and powerful rich and powerful will pale in comparison to the historic coalition of state and local government leaders, military veterans service organizations, labor unions, student loan borrower advocates, and legal and economic policy experts who recently spoke to SCOTUS with one voice to defend the legality and necessity of the student loan debt relief plan. They have called out the efforts to thwart relief for millions as blatantly political efforts to manipulate our judicial system. 

In all, the groups defending debt relief filed 13 amicus curiae briefs in support of the administration’s appeal of the Fifth and Eighth Circuit Courts decisions that have blocked implementation of the program and placed millions of student loan borrowers in economic limbo as they await desperately needed relief. 

Though each of the amici present the Court with their own unique perspective in support of the U.S. Department of Education, together they showcase the broad popularity, strong legal foundation, and urgent economic necessity underpinning President Biden’s effort to cancel student debt for 40 million Americans. 

Today, we break down each of these briefs and the compelling arguments made for immediate cancellation as a way to tackle the $1.7 trillion student debt crisis and the need to bring an end to partisan overreach and manipulation of the judiciary. 

Vulnerable Americans Will Suffer

From the outset, the Biden Administration has made clear that the student debt relief program is designed to provide the most relief to the neediest borrowers. The amicus briefs filed in this litigation bear that out. Student loan borrowers who are low- and middle-income and those from historically marginalized communities have the most to gain from cancellation and the most to lose if SCOTUS strikes it down. 

More than 70 legal services and borrower advocacy organizations filed a brief highlighting the human stories of those crushed by the weight of student debt loads exacerbated by the pandemic. They include a 60-year-old mother who lacked the resources to fund her daughter’s higher education and is now struggling to repay loans for, what turned out to be, a predatory college; a first-generation student who thought higher education would be key to upward mobility for his family, but he instead had to move home to live with his parents, even while working 18 hours per day, to keep up with his student loan payments after the pandemic hit; and many more. The brief draws a throughline between the pandemic-induced economic harms experienced by these borrowers and the Biden debt relief program that is necessary to mitigate further suffering.

Like those from low-income backgrounds, Black and Latino borrowers are also disproportionately burdened by the student loan debt crisis and have borne the brunt of the economic and public health impact of the pandemic. A brief filed by the Lawyers’ Committee for Civil Rights and more than 20 other civil rights organizations lays out how student debt cancellation is necessary to help begin to remedy decades of economic inequality and racial wealth disparities that have fueled the crisis for far too long. 

Leading labor unions shared that teachers, nurses, and other public service workers —  who face high educational costs and low wages — are particularly vulnerable to the severe financial precarity and resulting student loan defaults brought on by the ongoing economic harms of the pandemic. Similarly, veterans, particularly Black and brown veterans, have been disproportionately impacted by the student loan debt crisis as they have historically been targeted and preyed upon by for-profit colleges seeking access to their GI Bill benefits and subjected to burdensome federal student loan and forgiveness requirements compared to other borrowers.

In a separate brief, the NAACP highlights the dire necessity of debt relief for this group through the story of a U.S. Army veteran who lost his job due to the pandemic. Despite nearly a decade of serving his country, this borrower has been left virtually homeless and will only be able to access his Veterans Administration housing benefits if he is able to benefit from cancellation and improve his credit score. Economic and social science scholars affirm the experiences relayed by these advocacy groups, and point to the current and long term economic devastation caused by the pandemic — including high rates of job loss, the burden of sharp increases in the cost of living and reduced lifetime earnings — as an impetus for targeted relief. 

Attorneys general from 22 states from across the country also briefed the Court on the economic upheaval the pandemic has brought to their lower-income constituents, including widespread job loss, the struggle to afford necessities like food and housing, and an increased risk of delinquency and default on loan payments. These states urge the Court not to needlessly inflict even more hardship on their residents by striking down this critical, legal, and congressionally-authorized program.

A Solid Legal Foundation

Beyond the life-changing relief that student loan cancellation offers millions of struggling Americans, the Supreme Court should affirm the numerous lower court judgments upholding the debt cancellation program because it is grounded in clear legal authority. Several of the amicus briefs demonstrate that well-established principles of statutory interpretation should guarantee a victory for borrowers before the Supreme Court. 

Leading the charge to inform the court of Congress’s intent and the proper interpretation of the HEROES Act of 2003 (HEROES Act) — the statute that the administration used to implement the student debt relief plan — is a brief filed by Congressman George Miller, key author of the law in question and former Chairman of the U.S. House Committee on Education and Labor. This brief details the legislative history of the Act and “confirms the breadth of the Secretary’s authority to waive and modify student loan provisions in response to national emergencies.”

A brief filed by more than two dozen law scholars further interprets the plain language of the HEROES Act to show that the administration’s debt cancellation plan falls precisely within the authority Congress delegated to the Secretary of Education under that statute. The law scholars’ argument is grounded in more than a century’s worth of Supreme Court precedent that insists that judicial interpretation of a law must begin with the text’s “‘plain and unambiguous statutory language’ enforced ‘according to its terms.’”

In this case, the text of the HEROES Act plainly authorizes the implementation of a student debt relief program to ensure that borrowers are not put into a worse financial situation because of the ongoing COVID pandemic. The brief filed by the National Education Association picks up this baton, emphasizing that the implementation of the debt relief program cannot violate the Court’s major questions doctrine — a protection against agency overreach — when the Secretary’s actions so clearly fall within the scope of the powers granted him by Congress.  

The Relief Harms No One

Finally, a series of briefs from a diverse group, including local government leaders in the very states challenging debt relief, Missouri consumer advocate organizations, and conservative legal scholars illustrate that the arguments to strike down the program are on shaky ground.

A brief filed by more than three dozen local governments, including leaders within three of the states challenging cancellation, rebuts the economic injury claims made by opponents and instead highlights the real local economic benefits that will result from debt cancellation. The brief presents evidence from local leaders with close constituent relationships who have indicated that, in direct contradiction to claims made by Republican state attorneys general, residents on the ground stand to gain from the student debt relief plan. These amici give voice to the borrowers in local communities they represent who will not be harmed by the speculative loan revenue loss complained of by state officials in opposing states, but will instead suffer greatly because of the pandemic’s economic harms if the Court strikes down student loan debt relief. 

In another brief, ArchCity Defenders and other Missouri consumer advocates emphasize that the Missouri Higher Education Loan Authority (MOHELA) — the student loan servicing giant at the center of the states’ lawsuit — is an independent entity with no financial ties to Missouri’s treasury and thus no ability to grant the states standing to sue. The brief further argues that the possibility that MOHELA might lose revenue because of student debt relief is so speculative and remote that even if the agency were an arm of the state, Missouri would still have no standing to oppose loan cancellation.  

A brief by a pair of conservative law scholars drives home the fatal flaw at the center of these lawsuits: the Republican-led opposition’s complete lack of standing to sue and challenge the debt cancellation plan. The states’ standing theories are so extravagant that these scholars were compelled to oppose them despite disagreeing with the administration’s plan for student loan relief itself. The brief establishes that Missouri — one of the states fighting the relief program — is not the proper party to claim any harm from the loan servicing fees that MOHELA might lose due to loan cancellation. It further argues that the states’ tenuous claim to standing — potential lost loan revenue — is much too weak to justify the sweeping and overbroad remedy they seek from the Court: a nationwide injunction against the program. These scholars warn the Court that affirming the states’ weak theories of standing would lead to an unconstitutional expansion of the federal judiciary’s power and threaten the principle of separation of powers.   

Why It Matters

That such a broad and diverse group of experts from across the political and ideological spectrum came together in support of the student debt relief program speaks to the strength of the Biden administration’s legal position and the necessity of bold sweeping economic relief through cancellation. The Supreme Court can and must see through these political games to ensure that millions of working, low-, and middle-income Americans will not suffer because of the political desire to strike down this program.

Amber Saddler is Counsel at the Student Borrower Protection Center and a former Dorot fellow at Alliance for Justice.