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Biden v. Nebraska

Supreme Court of the United States
600 U. S. ____ (2023) (2023)
ELI5:

Rule of Law:

The authority granted to the Secretary of Education under the HEROES Act to “waive or modify” statutory provisions in response to a national emergency does not extend to establishing a nationwide student loan forgiveness program of vast economic and political significance, as such a measure requires clear and explicit congressional authorization under the major questions doctrine.


Facts:

  • The Higher Education Act of 1965 authorizes the Secretary of Education to cancel student loans only in specific, limited circumstances, such as for public service, death, or permanent disability.
  • In 2003, Congress enacted the HEROES Act, permitting the Secretary to 'waive or modify' provisions of federal student financial assistance programs during a national emergency.
  • The purpose of such waivers or modifications is to ensure that affected individuals are 'not placed in a worse position financially' in relation to their loans due to the emergency.
  • In March 2020, the President declared the COVID-19 pandemic a national emergency.
  • In August 2022, the Secretary of Education announced a plan under the HEROES Act to forgive up to $10,000 in student loan debt for borrowers with incomes under $125,000, and up to $20,000 for Pell Grant recipients.
  • The plan was estimated to apply to roughly 43 million borrowers and result in the cancellation of approximately $430 billion in debt.
  • The state of Missouri created the Missouri Higher Education Loan Authority (MOHELA), a public corporation that services federal student loans and earns revenue from those services.
  • The Secretary's plan would discharge many loans serviced by MOHELA, causing it to lose an estimated $44 million in annual revenue.

Procedural Posture:

  • Six states, including Missouri, filed a lawsuit in the U.S. District Court for the Eastern District of Missouri against the President and the Secretary of Education.
  • The plaintiffs sought a preliminary injunction to halt the student loan forgiveness plan.
  • The District Court, a trial court, dismissed the lawsuit, ruling that none of the plaintiff states had legal standing to bring the challenge.
  • The states, as appellants, appealed the dismissal to the U.S. Court of Appeals for the Eighth Circuit, an intermediate appellate court.
  • The Eighth Circuit granted a nationwide preliminary injunction, pausing the program, after concluding that Missouri was likely to succeed on its claim of standing.
  • The government, as petitioner, filed a petition for a writ of certiorari before judgment with the U.S. Supreme Court, asking it to hear the case before the Eighth Circuit issued a final ruling.

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Issue:

Does the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) grant the Secretary of Education the authority to establish a student loan forgiveness program that cancels approximately $430 billion in federal student loan debt?


Opinions:

Majority - Chief Justice Roberts

No. The HEROES Act does not grant the Secretary of Education the authority to establish the student loan forgiveness program. First, Missouri has standing to sue because the financial harm to MOHELA, a state instrumentality, constitutes a direct injury to the state itself. On the merits, the Secretary's action exceeds the authority granted by the Act. The power to 'modify' a provision implies making minor changes, not enacting 'basic and fundamental changes in the scheme' as this plan does. The power to 'waive' does not authorize the Secretary to draft a new forgiveness regime from scratch. This plan is not a waiver or modification but a complete rewriting of the law. Furthermore, the major questions doctrine applies because the program has vast 'economic and political significance.' Given the staggering cost and impact, the Secretary must be able to point to 'clear congressional authorization' for such a program, which the general 'waive or modify' language of the HEROES Act does not provide.


Concurring - Justice Barrett

No. The HEROES Act does not authorize the program. The major questions doctrine is not a substantive canon that overrides statutory text but an interpretive tool reflecting the 'common sense' expectation that Congress does not delegate decisions of vast economic and political significance in subtle or vague terms. Context, including the constitutional separation of powers, informs statutory interpretation, and a reasonable interpreter would expect Congress to speak clearly when assigning such a major policy decision to an agency. In this case, the context and the text of the HEROES Act demonstrate that the Secretary's program goes far beyond what Congress could reasonably be understood to have granted.


Dissenting - Justice Kagan

Yes. The HEROES Act grants the Secretary the authority to establish the loan forgiveness program. First, the Court should not have decided this case because Missouri lacks standing. MOHELA is a legally and financially independent entity, and its alleged financial harm does not transfer to the state; Missouri is merely an ideological plaintiff opposing a policy. On the merits, the majority misinterprets the statute by failing to read 'waive or modify' as a whole. The authority to 'waive' (eliminate) a provision, combined with the power to 'modify' it, grants the Secretary a spectrum of authority to make changes from minor to substantial. The Act was specifically designed to give the Secretary broad discretion to respond to national emergencies like the COVID-19 pandemic. The majority improperly uses its 'made-up major questions doctrine' to substitute its own policy judgments for those of the politically accountable branches of government.



Analysis:

This decision significantly solidifies the major questions doctrine as a powerful tool for limiting the authority of executive agencies. By applying the doctrine to a case involving federal benefits, the Court signaled that broad delegations of authority will be viewed skeptically not only in the context of regulation but also in matters of federal spending. This precedent makes it substantially more difficult for any administration to rely on general statutory language to enact major new policies, requiring instead explicit and specific authorization from Congress for actions with vast economic and political impact. The ruling effectively curtails the executive's flexibility to respond to national crises under broad emergency statutes.

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