Student Loan Case Could Redefine Limits of Presidential Power

Student Loan Case Could Redefine Limits of Presidential Power

This term, the Supreme Court is expected to rule on two challenges to President Joe Biden's student loan debt relief plan. Conservatives anticipate these rulings will significantly expand presidential power.

One of the cases involved a 2003 law that allows the federal government to "waive or modify" loan requirements during an emergency. This language has caused controversy, especially among the court's conservative justices.

What is the Court’s Power to Decide?

On Tuesday, the Supreme Court could severely limit President Biden's authority to act without congressional approval when it hears two cases related to his plan to forgive student loan debt. These decisions come at a crucial juncture for his administration which has been struggling for legislative victories that would put its ambitious plan into action.

In one case, six states and two borrowers are contesting the government's ability to forgive student loan debts in cases of national emergency. They claim that the HEROES Act does not give the Secretary of Education extra authority over loan forgiveness beyond what is allowed by statute.

But the Court must first decide if the six states and two borrowers have standing to sue in the first place - a legal concept which requires them to demonstrate they would suffer financial harm if their debt were cancelled. They are expected to release their rulings by the end of this term, typically in June or July.

Chief Justice John Roberts stressed the need for a sense of fairness in this case, joining three liberal justices in asserting that Missouri does not possess standing to sue. He used the example of a high school graduate who couldn't afford college but started a lawn care business with help from a loan.

Other conservative justices voiced reservations that canceling student loan debt might be unfair, particularly to those who had already paid their loans and those not eligible. Yet they maintained that the law is sufficiently broad to enable the government to modify student financial assistance programs as the Biden plan does.

The issue of standing is an essential element in this dispute, reflecting growing skepticism among courts about presidents' powers to implement policies without congressional authorization. If the Supreme Court sides with lower courts and strikes down Biden's plan, it would likely mark one of the biggest limits on presidential powers to date.

Does the President Have the Power to Cancel Student Loans?

The President's power to cancel student loans has caused considerable controversy. Multiple lawsuits have been filed in opposition, and many conservative legal experts contend that the President is acting outside his authority.

The Supreme Court will soon be asked to determine if President Biden can cancel federal student loans. The case stems from his plan to forgive debt for tens of millions of Americans.

Biden campaigned on canceling student debt, and has stated his support of the idea if passed by Congress. But his White House has been overwhelmed with letters from supporters requesting he use his executive powers to cancel student debt without congressional permission.

One major argument against President Biden is his potential use of a 2003 law to cancel student loans. Entitled the HEROES Act, this legislation grants education secretary authority to waive or modify any statutory or regulatory provision related to student loans in case of a declared national emergency.

But HEROES also includes an important constraint: that recipients of relief do not become financially worse off due to the emergency. This requirement helps guarantee borrowers don't become so depleted that they become less likely to repay their loan - something key for HEROES' focus on this concern.

However, Biden administration lawyers assert that the HEROES act gives the Secretary authority to cancel all or some loans for any borrower affected by an emergency. This argument could put new limits on President Obama's authority.

Chief Justice John Roberts and two of his conservative colleagues asserted that the President cannot make such a determination unilaterally. They maintained that under the principle of separation of powers, power must be divided between Congress and the President to prevent abuses of authority.

The Court's conservative members argued that the HEROES act does not grant Education Department unlimited authority to cancel student loans, noting that Presidents Barack Obama, George W. Bush and Donald Trump used emergency powers to cancel student loans even when there weren't any crises present.

Does the President Have the Power to Forgive Student Loans?

Recently, President Biden's plan to forgive student loans has sparked a legal challenge that raises doubts as to his power to do so. If the Supreme Court rules in his favor, it could significantly expand what actions the President can take with regard to student debt cancellation.

Legal challenges have been lodged against President Obama's plan to forgive up to $20,000 of student loan debt for qualified borrowers, which could mean that 43 million people could potentially benefit from it. These challenges come from Republican-led states and a small group of borrowers who claim that the plan is unconstitutional.

This week the Supreme Court is hearing these cases and is likely to issue its ruling by June or early July. As no other cases related to student loan forgiveness programs have been heard by this court before, it will take some time for them to rule on this one.

Though the Supreme Court has yet to make a ruling in this case, several legal experts anticipate they will reject the President's authority to cancel student loans. They contend that such an expansive power violates separation of powers principles and goes against their view on individual responsibility.

This is not the first time a President has used emergency powers in an illegal way, and this case could have serious repercussions for other presidents who attempt to utilize such power in future. For example, Trump has already used emergency measures to fund his wall along the southern border after Congress refused his request.

If the Court rules against President Obama, it can invalidate any executive order that violates the Constitution or isn't authorized by Congress. Furthermore, any money spent on student loan forgiveness programs without congressional authorization must be returned.

After the Supreme Court ruling, the Biden administration can still implement student loan forgiveness program; however, it will take some time to get everything set up. The President needs to reauthorize it and it could take months before changes that may make the program more equitable are implemented.

Does the President Have the Power to Forgive Student Loans in the Future?

Presidents are not the only ones with authority over student loan matters. Congress also has the power to establish debt cancellation programs and amend laws that pertain to student loans.

In the past, the White House has used student loan forgiveness as a tool to assist borrowers with low incomes and those with disabilities. Additionally, it has waived payment-counting rules and altered income-driven repayment plans for millions of borrowers.

However, the Supreme Court is deliberating two cases that could expand President Biden's powers. Justices will determine if his administration had legal authority to forgive student loans for tens of millions of borrowers and set a precedent that will limit future presidents' ability to make such significant changes within federal government.

The Supreme Court is currently reviewing lawsuits filed by a group of states and an advocacy nonprofit. These cases contend that the government lacked legal authority to forgive student loans, and their plan violates federal law.

These groups contend that the President's plan is discriminatory and fails to adhere to federal law requirements that allow him to cancel student debt. Furthermore, they assert that it will harm some states as well as a major student loan servicer.

However, the Justices may be able to derail these arguments and rule that President can forgive student loans provided he follows federal law and regulations. Furthermore, they could decide that certain veterans or disabled borrowers can also be exempt from debt cancellation.

One of the Justices could also rule that President Obama does not possess the power to cancel debt from borrowers who have defaulted in the past. If this were to be determined, it would serve as an important rebuke to both his policies and those of his associates.

The Biden administration has made a concerted effort to expand student debt forgiveness, but there are serious doubts about its most ambitious student debt policy. Not only could this initiative have an immense impact on borrowers' lives, but taxpayers could end up footing the bill in billions of dollars.