Supreme Court Continues Partisan Course
Use of "major question doctrine" threatens more than student loan debt
The 6-3 decision of the US Supreme Court (SCOTUS) blocking the Biden administration’s effort to provide some relief to Americans burden with student loan debt is another example of judicial overreach and reflects the partisan nature of its recent edicts. In writing the majority opinion in Biden v. Nebraska, Chief Justice John Roberts continues to pursue his creative “major questions doctrine” with little regard for the impact the court’s decision likely will have on serious economic and social concerns.
America’s long standing student loan debt crisis was at issue in Biden v. Nebraska, but from the beginning Roberts’ opinion pays little attention to how this crisis has developed. In fact, even his reference to the first federal student loan program, the National Defense Education Act of 1958, is inaccurate.
The program lacked the broad mission he attaches to it: “To ensure that Americans could keep up with increasing international competition.” It had a far more narrow objective: “…(C)orrect as rapidly as possible the existing imbalances in our educational programs which have led to an insufficient proportion of our population educated in science, mathematics, and modern foreign languages and trained in technology.”
The federal student loan system the Biden administration inherited is more comprehensive, and it has been complicated further by years of economic and political neglect.
Roberts’ opinion leaps from the NDEA Act of 1958 for which $183 million was appropriated---not all for student loans---to today’s crisis in which 43 million borrowers are faced with outstanding federal student loans totaling $1.6 trillion (he shave one tenth of a trillion dollars from most of the estimates I have seen). At no point does he appear to recognize that the 43 million borrowers likely have spouses and/or families whose lives are also being disrupted by this crisis. Nearly one-third of the country’s adult population is in all probability being affected by this debt burden.
The Biden administration’s decision to interpret the Higher Education Relief Opportunties for Students Act of 2003 (HEROES Act) differently than the Trump administration is cited by the chief justice as if this is either unusual or illegal. In keeping with the Roberts Court’s laissez-faire approach to conflicts of interest, there is no mention of Betsy DeVos’s significant investments in for-profit colleges and companies engaged in servicing federal student loans. Nor does Roberts note that as Trump’s Secretary of Education, she reversed efforts by the Obama administration to provide relief to some student loan borrowers.
Much of his epistle is an exhaustive analysis of definitions for the words “waiver” and “modify” as they appear in the HEROES Act. Roberts challenges the definitions used by the Biden administration and asserts that Congress had different meanings in mind when it passed the legislation in 2003. He does not, however, explain why if his view is correct, Congress was not the plaintiff in this case rather than a group of Republican state attorneys general.
And that brings us to the issue of “standing.”
Article III of the US Constitution requires that a plaintiff in a case have a personal stake in the outcome. The plaintiff must have suffered actual injury, some clear harm or loss of money or some protected right. The chief justice offers as his candidate for standing, the Missouri Higher Education Loan Authority (MOHELA), a nonprofit government corporation created in 1981 by the state of Missouri to insure state residents are able to access federal student loans.
A loan servicing corporation, MOHELA contracts with the US Department of Education to manage student loan repayments for which it is paid a fee. According to Roberts, if the Biden administration plan is implemented, MOHELA will lose “roughly half” its current fees from DE—$44 million. It uses its profits to support higher education programs and student financial aid in Missouri, providing almost $530 million in funding over its 42 years of operation, slightly less than $13 million annually.
MOHELA’s management declined to sue the Biden administration over its relief plan, but the Missouri attorney general did sue. Roberts asserts in his opinion that because MOHELA is an “instrumentality” of Missouri, the state will be harmed by its revenue losses, therefore, Missouri has standing to sue.
Incidentally, it should be noted that Missouri’s state support for higher education is limited---$623 per capita. The national average is $938. SC’s per capita expenditure is $899. Only the District of Columbia and five states (Maine, Florida, Georgia, Tennessee and Nevada) provide lower levels of support than Missouri.
Using a student loan servicing company to provide standing to sue in this case is offensive. It is difficult to believe that the SCOTUS majority is not aware of the many complaints made against such outfits. They have been accused of misallocating loan repayments, steering borrowers towards multiple forebearances (temporary waivers of repayments) instead of encouraging borrowers to enroll in income-driven repayment programs and providing unclear information about how to pursue those programs. MOHELA has been the object of over a thousand complaints filed with the local Better Business Bureau in the past year alone.
Although unfortunate, the mistake in determining standing need not be fatal. Trashing the Biden administration’s efforts at relief without any serious analysis of how the federal student loan crisis developed, however, is tragic and confounding. The individuals and families impacted by this crisis likely will read the SCOTUS majority’s opinion as their government failing to have any concern for their plight.
At a minimum, the major increase in federal student loan debt occurring between 1995 and 2017 should have been noted. A report of the Congressional Budget Office reveals that during this period the outstanding debt increased from $187 billion to $1.4 trillion. That startling expansion resulted from several factors, including the decline in state support, an outsized increase in tuition at public colleges and universities---120%---and the huge growth in enrollments at for-profit institution---from 400,000 in 2002 to 2,000,000 in 2017. Despite the pauses in repayment of student loans in recent year, the total debt has continued to grow, leaving many owing more now than when they originally received the loan. Not only are present borrowers discouraged by the lack of relief, but the decision surely will also dampen the ambitions of future students.
Finally, with this opinion SCOTUS again has inserted itself into a complex political issue using a judicial doctrine that has no basis in either constitutional or common law. The so-call “major question doctrine” claims for the court the right to block action by the executive branch on the grounds it (the executive branch) is not following the law as authorized by the legislative branch. In all cases thus far, including this one, the legislative branch has not objected to the executive branch’s application of the law. That some members of the legislative branch have objected is not sufficient. The spurious intervention of the SCOTUS majority in this case is outside their powers of judicial review. It amplifies the partisan divide in our society, undermines the broad development of our country’s human resources and endangers the capacity of our government to address future needs.
https://www.govinfo.gov/content/pkg/STATUTE-72/pdf/STATUTE-72-Pg1580.pdf
Schwegler, Stephan J. (1982). Academic Freedom and the Disclaimer Affidavit of the National Defense Education Act: The Response of Higher Education. Dissertation: Teacher's College, Columbia University.
https://www.americanprogress.org/article/inside-the-financial-holdings-of-billionaire-betsy-devos/
https://www.npr.org/2020/11/19/936225974/the-legacy-of-education-secretary-betsy-devos
“The Law and Political Economy of a Student Debt Jubilee,” by Luke Herrine,
Buffalo Law Review, vol. 68, April 2020, No.2
https://www.nytimes.com/2017/03/07/books/review/lower-ed-tressie-mcmillan-cottom.html