I've been obsessing over an obscure part of the Supreme Court ruling on student loan forgiveness. The relevant text of the HEROES Act says the Secretary of Education can "waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV," but Chief Justice Roberts makes a startling claim about this:
The Secretary does not identify any provision that he is actually waiving. No specific provision of the Education Act establishes an obligation on the part of student borrowers to pay back the Government. So as the Government concedes, “waiver”—as used in the HEROES Act—cannot refer to “waiv[ing] loan balances” or “waiving the obligation to repay” on the part of a borrower. Tr. of Oral Arg. 9, 64.
Huh. Students have been paying back loans for many years under threat of late fees; credit score downgrades; garnishment of wages, tax refunds, and Social Security; and court action. Given this, it sure seems like the law must establish an obligation to repay loans. And yet Roberts not only says it doesn't, he says the government "concedes" this point. He points to oral arguments, so let's go there:
GENERAL PRELOGAR: The relevant decision memo specifically says, I hereby issue waivers and modifications of the relevant provisions of Title IV.
....JUSTICE BARRETT: And just to be clear, waiver in the statute refers to waiving the statutory and regulatory provisions, not waiving the obligation to repay?
GENERAL PRELOGAR: That's correct. So, if you kind of trace through the specific provisions that he invoked, they are statutory and regulatory provisions and they establish the terms of the student loan program and then also deal with discharge and cancellation authority. And he said that he was issuing waivers and modifications of — of all of those provisions.
So you have to "trace through" all the provisions. And what are those provisions? The Office of Legal Counsel said this:
The provisions requiring individuals to repay student loans are...set forth in the U.S. Code and the Code of Federal Regulations. See, e.g., 20 U.S.C. § 1087dd(c) (requiring loans agreements to “provide[] for repayment of the principal amount of the loan”); 34 C.F.R. § 685.207 (“[a] borrower is obligated to repay the full amount of a Direct Loan”); id. § 682.102 (“[a] borrower is obligated to repay the full amount” of a loan under the FFEL Program); id. § 682.209 (“Repayment of a loan.”).
And they are “applicable to the student financial assistance programs under title IV” because they direct how financial assistance provided under title IV should be repaid. The Secretary may accomplish the cancellation or reduction of student debt by “waiv[ing] or modify[ing]” these provisions.
Sure enough, this all seems legit. The first statutory cite says loans "shall" be governed by a note that "provides for repayment of the principal amount of the loan, together with interest thereon, in equal installments." The second says, "A borrower is obligated to repay the full amount of a Direct Loan, including the principal balance, fees, any collection costs." The third says, "Generally, the borrower is obligated to repay the full amount of the loan, late fees, collection costs chargeable to the borrower." The fourth says, "For a Consolidation loan, the repayment period begins on the date the loan is disbursed [and so on for other types of loans]."
So Roberts is being pretty disingenuous when he says repayment can't be waived because there's no payment requirement in the first place. This is too clever by half. As common sense dictates, of course the law says loans have to be repaid—multiple times. This is true even if the repayment requirement isn't directly adjacent to other provisions and even if repayment happens to be to a third party servicer rather than directly to the government.
This kind of game playing makes me less sympathetic to Roberts's overall argument that "waive or modify" was never meant to be so expansive as to include outright cancellation of student loans. If his case were as strong as he thinks, he wouldn't need to include this kind of nonsense. But I still think the decision overall is a close call.
I mean, isn't repayment kind of the whole idea of a "loan"? The prinicpal, anway. Unless they defined "loan" as something else, for the purposes of the law?
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It seems that Congress did a pretty stupid thing. It didn't limit the President's authority to "waive or modify" in any way. It didn't say "before such and such a time" or "up to a certain amount per recipient" or "not including permanent cancellation". They gave the President carte blanche and he ordered the most expensive item on the menu.
That seems like what most people would do. If Congress is offended it should look at the three fingers pointing back.
And this is the point of dissenters: it is not the job of the Court to “rewrite” laws, however unwise, based on their majority’s own policy preferences. The current Court is unconstrained by facts, and the law.
it is not the job of the Court to “rewrite” laws, however unwise, based on their majority’s own policy preferences.
No, but it can be the job of the court, depending on circumstances, to clarify ambiguity. For a law to be properly implemented and administered, we need to know what it means. Sometimes we don't. I agree with Kevin: this was a close call.
There's a reasonable (though not overwhelming) case that the HEROES Act's "waive and modify" provisions were referring to loan terms (interest rates, forbearances, processing fees, etc) rather than principal write-downs.
As it happens I agree with liberals that the standing of the plaintiffs was tenuous, and I also agree with Justice Kagan about the court's worrying tendency to engage in judicial activism. I'd have preferred that the court not taken the case in the first place. Congress is perfectly capable of legislating if clarification is needed, or if it disagrees with the executive branch's actions.
But this decision wasn't the massive outrage claimed by many on the left. The debt cancellation was a half trillion dollar gift from taxpayers to a subset of the population. That kind of largess in our polity normally gets a crystal clear green light from the legislative branch.
Your words:
I agree! Nowhere in the Constitution are Federal courts empowered to ‘clarify ambiguity’. That has been done, first, by the Code of Federal Regulations, prepared by departments, agencies and administrations of the Executive, through processes that invite public comment on drafts from any interested parties; and secondly, by further legislation passed by the Congress. The Supreme Court decided in Chevron v. NRDC that any ‘permissible construction’ of a statute should stand: “the court does not simply impose its own construction on the statute.” This precedent stood for nearly four decades before being reversed by the supposedly “cautious” Roberts Court.
As you point out, not even a close call, and for two reasons:
1) The law clearly allows this authority during times of national emergency.
2) Standing. The six red state AG's had no standing. They could not point to any injury their states would suffer. The interests of the servicing agency in MO, MOHELA which they claimed to represent, specifically did not join the case because they did not think that they would lose any money -- some loans would stop being serviced, but news ones would begin being serviced. The two litigants who claimed injury were merely whining. One didn't have federal loans, the other qualified for $10K but wanted $20K. Boo fucking hoo, if we granted standing to everyone who wished they qualified for a government program but didn't it would be a mess.
So the court leaped over the standing moon so they could say "I can't believe that Congress meant what they said when they passed this law -- twice". Major questions doctrine to the rescue, they've been using this a lot lately to dismantle lots of laws.
"Under the HEROES Act, the Secretary “may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Education Act] asthe Secretary deems necessary in connection with a war or other military operation or national emergency.” §1098bb(a)(1)."
https://www.supremecourt.gov/opinions/22pdf/22-506_nmip.pdf
Was there a "national emergency" in 2022? Yes or no.
Did the Secretary of Education "waive or modify any statutory or regulatory provision applicable to the student financial assistance programs" in 2022? Yes or no.
If you say yes twice it means that the Secretary of Education had the very literal ability to cancel student loan debt.
If you say no even once, you're a liar.
Yeah, real fucking "close call".
It's just not a close call.
The language was clear.
The intent was clear.
There was nothing "major" to be determined here.
Well, here's the too clever by half response:
If there's no payment requirement in the first place, then can't the government simply not require payments, since they're... not required?
There's nothing to waive, nothing to modify, no special powers to invoke. Just don't require payments, as not required.