It might seem cruel to say, but the Supreme Court was right in striking down President Biden’s $450 billion student loan forgiveness plan. Yes, hundreds of thousands of students who thought the burden of their student loans had been lifted were greeted last Friday with the news that the SOBs on the Supreme Court—the same ones who overturned Roe v. Wade—have condemned them to a life of servitude which, many of them believe, is inherent in borrowing money to go to college.
Most of us are sympathetic to the student loan borrowers. I did not enjoy borrowing money for college but had no choice. It was either borrow or not go to law school. I also found that my student loan repayments, small when compared with what recent generations of student debtors owe, were a hindrance. Buying a new car was out of the question. Taking on more debt, even after I secured a good paying job made possible by the education I financed, seemed reckless. So, I did not do it. I even worried about being able to repay the loan if I found myself unemployed, so I paid more than the required monthly repayment amount. I printed out a loan amortization table and calculated how I could avoid future loan repayments by making prepayments.
When President Biden announced his student loan forgiveness plan, I was (correctly) not included. The idea of repaying student loan borrowers for payments made many years previously is ridiculous. Reimbursing borrowers who paid back their student loans is, however, somehow fair. Had I not had to repay my student loans, I could have saved more, and would have a lot more money today. Or perhaps I could have visited St. Petersburg and visited the Hermitage before Putin effectively closed Russia to sane Americans. You get the idea, but, fortunately, President Biden drew a line. The loan forgiveness program could have cost more than a trillion dollars if taken to its logical extreme.
President Biden was right to not include me in his student loan plan. And, but for the lack of authority to forgive part or all loans of 43 million borrowers, was right to seek loan forgiveness for student loan borrowers struggling with student loan debt. The problem, identified by the conservative majority on the Court in striking down Biden’s action, is that the law on which Biden premised his loan forgiveness plan did not allow it.
The Court majority analyzes the 2003 HEROES Act, which grants the president authority to waive or modify student loan repayment terms to respond to hardships caused by national emergencies, and concludes that it is inconceivable that Congress intended the wholesale forgiveness of $450 billion in student loans with no analysis of whether the individual borrowers identified for forgiveness needed the help. The Court’s dissenters, three liberal Justices, argued that there is no explicit limitation on the right of the president to “waive or modify” and that a waiver can be as broad as the president would like.
Following the logic of dissenters, President Biden could have forgiven every penny of student loan debt. If a child of Elon Musk, for now the world’s richest oligarch, had a student loan, the Justices could have argued, President Biden could have freed him of the nuisance of having to repay the loan.
President Biden responded to the Court’s decision by condemning it. He vows to find another way to deliver on his promise of debt forgiveness. Will Biden be able to do something? Yes. The Court’s decision recognizes the power of the president to “waive or modify.” Biden will be able to provide better-targeted loan relief to millions of borrowers.
All of us should be glad that President Biden cares so much about student loan debtors. Even though the concept of forgiving student loan debt is highly political, the reality of out-of-control student debt is real for millions of borrowers.
President Biden has executive authority to provide targeted student loan debt relief, but he needs to part company with Senator Elizabeth Warren (D-MA), the politician responsible for pushing Biden to exceed his executive authority by basing $450 billion of federal spending on what she saw as a loophole in a statute.
Congress is highly unlikely to simply go back and amend the HEROES Act with language like, “The President can declare anything he wants to be an emergency and forgive any federal debt owed by anyone, regardless of the federal costs involved or whether the forgiveness is fair or needed.” Such a “solution” would be easy. It would also be monumentally unfair, illegal, fiscally reckless, and stupid.
The brouhaha resulting from the Court striking down the Biden plan should prompt Congress and the public to take an in-depth look at the cost of higher education and the issue of how students and their families finance it. At the top of the list is addressing the problem of college costing too much. Congress must figure out a way to make college affordable without massive student loan debt. The best student loan is the one never made.
Congress also needs to face up to the reality that if you forgive current student loan borrowers’ debt, you are creating a precedent for future generations to ask for the same thing. It may be time to abolish student loans altogether and for Congress to figure out a way to make college free for most Americans. Possible? Yes. Extremely difficult? Absolutely.
The full text, including the dissenting opinion, of Biden v. Nebraska may be found here.
J.E. Dean is a retired attorney and public affairs consultant writing on politics, government, and other subjects. He is a former counsel to the Committee on Education and Labor of the U.S. House of Representatives where he worked on student loan and other higher education legislation.
Reed Fawell 3 says
“President Biden responded to the Court’s decision by condemning it. He vows to find another way to deliver on his promise of debt forgiveness. Will Biden be able to do something? Yes. The Court’s decision recognizes the power of the president to “waive or modify.” Biden will be able to provide better-targeted loan relief to millions of borrowers.”
That is unlikely in my view – Only for starters center opinion syllabus (pg 3)
” (a) The text of the HEROES Act does not authorize the Secretary’s loan forgiveness program. The Secretary’s power under the Act to “modify” does not permit “basic and fundamental changes in the
scheme” designed by Congress. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 225. Instead, “modify” carries “a connotation of increment or limitation,” and must be read to mean “to change moderately or in minor fashion.” Ibid. That is how the word is ordinarily used and defined, and the legal definition is no different.
The authority to “modify” statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them. Prior to the COVID–19 pandemic, “modifications”
issued under the Act were minor and had limited effect. But the “modifications” challenged here create a novel and fundamentally different loan forgiveness program. While Congress specified in the Education
Act a few narrowly delineated situations that could qualify a borrowerfor loan discharge, the Secretary has extended such discharge to nearly every borrower in the country. It is “highly unlikely that Congress” authorized such a sweeping loan cancellation program “through such a subtle device as permission to ‘modify.’ ” Id., at 231
John Dean says
Thank you for reading the piece and for your opinion.
I believe authority in the Higher Education Act provides Biden with a lot of room to modify terms. For example, he has already waived reporting delinquencies to credit bureaus.
Borrowers that have not made payments for three years may understandably have assumed their loans would be forgiven and now face duress as a result (having taken on other financial commitments that they would not have had they been in student loan repayment). There may be an opportunity for the President to develop some sort of long-term suspension of loan repayment for borrowers, or even forgiveness.
You may be right that the process will be more difficult than the Court majority assumed, but the Higher Education Act, for good or for ill, provides the Secretary of Education with a lot of discretion in managing loans.
In any case, thanks for sharing your view. We’ll see which one of us is right eventually. . .
Barbara Denton says
President Biden made this student loan debt forgiveness to buy votes for the election in 2022. He knew it was illegal. So did Nancy Pelosi who has never been bothered at the illegality of Dem schemes. However, even she said he could not do it and the Supreme Court pointed to her statement in their decision. Those who made the foolish mistake of going to schools they could not afford, graduating with a useless degree which then did not qualify them for a good salary are going to have to pay their bills. There should be no student loan programs whatsoever. Students will think twice about going to college when they are not college material. We paid in full for our daughters education. We did not take elaborate vacations, buy a new car every 3 years or do a lot of the things we see parents doing today. If you make that choice fine, however, do not expect other people to pay for the education of your children. We are not communists yet, but we are heading there.
College should never be free. You have no respect for things you do not pay for. We have students who do not qualify for college. We have so-called professors who should not be teaching human beings anything. Until this mess is sorted out an people realize they are not getting the value for their dollar we are going to have this mess.
Jeff McGuiness says
Thanks for that excellent piece, John. I graduated from American University’s law school in 1977 when the total cost of that three year tuition was about $18,000. In today’s money accounting for inflation, that $18,000 would be about $96,000. However, AU’s law school tuition for three years is now in the $190,000 range, nearly twice as much adjusted for inflation. The same is true for many other law schools. Why has a law degree become twice as expensive over the past 45 years? Worth a discussion.
Reed Fawell 3 says
I agree with Barbara Denton’s comment above. Jeff McGuiness above asks: “Why has a law degree become twice as expensive over the past 45 years? Worth a discussion.”
Higher education, college and graduate school, prices have exploded for several primary and interrelated reasons that include:
Hyper over marketed and under regulated student loans fund kids who should not be in college, and/or kids who should be self funding if they be qualified. Some say 60% of the amount of these student loan funds are used by colleges to fund annual increased spending, mostly on bogus costs that have little or nothing to do with educating the students who pay these costs. For example, many colleges today have more administrators than tenured teaching professors. And non teaching costs (from climbing gyms to faculty research to garbage education courses) have exploded in colleges. Meanwhile teaching costs have shrunk yearly into ever smaller percentages of total costs.
All this is because higher education today is considered a big high margin money making business for those elites who now market and run their businesses for their own benefit and ideological satisfaction while they use their students (with student loans and parents money) as cash cows to foot all the bills. This is why legitimate teaching and learning in college and university education has collapsed. Everyone gets in and stays in. No one fails. Most everyone gets an A or B, now matter their performance. Students now are cash commodities that must be kept paying through the nose to fund a largely illegitimate operation. And why ever more kids are encouraged to attend college irrespective or whether or not they are qualified. Most serious scholar on the subject say no more that 20% of the general population are qualified to take advantage of a true college education even in times when high quality public high school education is available like say in the 1950s and 1960s. A typical 12th grade education back then was far above the mean of a 12th grade graduate today. Today’s schools are often and regularly turning out high school graduates with 8th grade educations. Why should that be a surprise? Few are ever held back a grade. School discipline has largely collapsed in many systems. So most of our bragging about our schools today is false, and tragically so. But few want to admit it. And most of us ignore it.