Like so many of you, the UC Berkeley Center for Consumer Law and Economic Justice is dismayed by the decision from the U.S. Supreme Court striking down President Biden’s student loan debt relief plan. We join in the deep disappointment of the millions of Americans who hoped for some relief from the burden of student debt, which today eclipses $1.78 trillion dollars and has prevented millions of people from purchasing a home, launching a business, or starting a family.
The Court’s opinion in Biden v. Nebraska rests not only on a misapplication of the law, but also on a misapprehension of the facts. In the face of significant evidence to the contrary, the six-Justice majority held that the State of Missouri had standing –– that is, a right to challenge the plan in federal court –– based on the financial harm that debt cancellation could hypothetically cause the Missouri-based loan servicer MOHELA. Never mind the fact that, as the Center explained in an amicus brief to the Court, MOHELA was designed by the Missouri legislature to be entirely separate from the state of Missouri. As our colleague David Nahmias told ABC News before oral argument in February, "The relationship between Missouri and MOHELA ... in the law that created MOHELA, is such that harm just cannot, cannot happen.” Because financial harm to MOHELA would not affect Missouri, the state’s professed injury should have been far too shaky to satisfy the Court. Or, as Justice Kagan observed in dissent, "Is there a person in America who thinks Missouri is here because it is worried about MOHELA’s loss of loan-servicing fees? I would like to meet him."
Nevertheless, the majority elided these facts and found standing for Missouri and its partner states in a decision significantly at odds with the Court’s precedent. The majority went on to hold that student debt cancellation exceeded the authority delegated to the President by Congress. In doing so, the Court never mentioned the unprecedented effects of the COVID-19 pandemic on borrowers, and willfully set aside the plain-text meaning of the Higher Education Relief Opportunities for Students Act. That law broadly delegates power to the President to cancel student loans in the midst of a national emergency –– just what President Biden did, but which the Supreme Court now has undone.
As painful and disappointing as the Court’s decision may be, all hope is not lost. On the heels of the Supreme Court decision, the Department of Education announced the first steps toward accomplishing debt cancellation through the Higher Education Act. And even without that new potential avenue of relief, the Administration has already implemented other programs that can assist borrowers who are struggling with student debt, including expanding income-driven repayment plans and federal loan forgiveness plans for public servants. More opportunities for borrowers will become clear in the coming weeks. Rest assured, the Center stands ready to support our community of students, advocates, scholars, alums--and borrowers more generally.
News from the Supreme Court this week has been bleak –– for historically disadvantaged populations seeking to access the benefits of higher education, for LGBTQ+ people hoping to engage fully and equally in public life, and for student borrowers struggling under the burden of student debt. It is not lost on us that these decisions were handed down just before the Fourth of July.
We at the Center are deeply concerned by these decisions, and even more determined to work for an economically just and equitable society, one that provides everyone the right to life, liberty, and the pursuit of happiness. Thank you for joining us in this fight.