Biden Administration Gears Up to Tackle Student Debt After Wealth Transfer Failure

The Court considered two cases. … But in the second, Biden v. Nebraska, the Court held that the State of Nebraska had shown that Biden’s plan would hurt MOHELA, its nonprofit student loan provider.

In the opinion, Roberts also quoted former Speaker of the House Nancy Pelosi (D-CA), who admitted Biden did not have the constitutional authority to cancel student loan debt via executive powers alone, asserting that it “has to be an act of Congress.”

The opinion reads in part:

The sharp debates generated by the Secretary [of Education]’s extraordinary program stand in stark contrast to the unanimity with which Congress passed the HEROES Act. The dissent asks us to “[i]magine asking the enacting Congress: Can the Secretary use his powers to give borrowers more relief when an emergency has inflicted greater harm?” … The dissent “can’t believe” the answer would be no. … But imagine instead asking the enacting Congress a more pertinent question: “Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?” We can’t believe the answer would be yes. Congress did not unanimously pass the HEROES Act with such power in mind. … As then-Speaker of the House Nancy Pelosi explained:

“People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.” Press Conference, Office of the Speaker of the House (July 28, 2021).

All this leads us to conclude that “[t]he basic and consequential tradeoffs” inherent in a mass debt cancellation program “are ones that Congress would likely have intended for itself.” … In such circumstances, we have required the Secretary to “point to ‘clear congressional authorization’” to justify the challenged program. … And as we have already shown, the HEROES Act provides no authorization for the Secretary’s plan even when examined using the ordinary tools of statutory interpretation—let alone “clear congressional authorization” for such a program.

However, after the Court’s decision, Biden signaled that his administration would continue to seek ways to provide student debt relief.

“Today’s decision has closed one path,” Biden said. “Now we’re going to pursue another.”

Student loan payments resume in October after over three years, as they were originally paused in March 2020.