A decision in the case, which is expected this summer, will affect roughly 40 million borrowers who are eligible for relief.
— The Supreme Court's conservative wing appeared to doubt the legality of President Biden's plan to cancel up to $20,000 in student loan debt for millions of Americans, hearing oral arguments in a pair of disputes over the program on Tuesday.
The Department of Education relied on a 2003 law known as the HEROES Act to wipe out the debt, totaling roughly $430 billion. That law authorizes the education secretary to"waive or modify" student financial assistance programs for borrowers"in connection" with a national emergency, such as the pandemic.
"Most casual observers would say if you're going to give up that much amount of money, if you're going to affect the obligations of that many Americans on a subject that's of great controversy, they would think that's something for Congress to act on, and if they haven't acted on it, then maybe that's a good lesson to say for the president or the administrative bureaucracy that maybe that's not something they should undertake on their own," he said.
The major questions doctrine holds that there must be clear congressional authorization if an agency wants to decide an issue of"vast economic or political significance." The states have accused the Biden administration of attempting to bypass Congress with its plan to unilaterally cancel student debt, and argue the secretary of education needs clear, express congressional authorization to wipe out the loans.
Prelogar, though, reiterated that the states are not the proper party to challenge the program, but acknowledged that loan service providers would be. She also noted that Congress could take legislative action if it disapproves of the debt relief program. The appeals court focused its decision on the Higher Education Loan Authority of the State of Missouri, or MOHELA, a state-created entity that services federal student loans, finding that the financial impact on the loan servicer due to the debt discharge threatened financial harm to Missouri.
While several of the conservative justices expressed concerns over the agency's power, the three liberal justices, joined by Justice Amy Coney Barrett, suggested that the states do not have the legal right to sue. "If MOHELA is an arm of the state, then why didn't you just strong-arm MOHELA and say you've got to pursue this suit?" she said.
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