Supreme Court questions Biden student-loan relief worth billions

(Bloomberg) --Conservative US Supreme Court justices questioned the legality of President Joe Biden's plan to slash the student debt of more than 40 million people, as arguments began in a high-stakes showdown over presidential power.

Chief Justice John Roberts told a Biden administration lawyer the program will have enormous financial implications for millions of Americans.  

"We're talking about half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of modifying?" Roberts said, referring to language in the 2003 law at the center of the case. 

The law, known as the Heroes Act, says the secretary can "waive or modify" provisions to ensure that debtors "are not placed in a worse position financially" because of a national emergency.

The student loan plan would forgive as much as $20,000 in federal loans for certain borrowers making less than $125,000 per year, $250,000 for households. The Congressional Budget Office estimates the cancellation would cost about $400 billion over 30 years.

The court on Tuesday is hearing two challenges to the program, one filed by a group of Republican-run states and another pressed by a conservative advocacy group known as the Job Creators Network on behalf two borrowers who say they are being unfairly excluded from the program's full scope. 

Biden Student-Debt Relief Faces Make-or-Break Supreme Court Date

The conservative-controlled Supreme Court has already stopped Biden from blocking evictions during the pandemic and requiring workers to get Covid vaccines or regular tests. The justices also have slashed the Environmental Protection Agency's power to address climate change. All three cases were decided 6-3 along ideological lines.

Those rulings are now key precedents in the student loan case. The majority in those cases established the "major-questions doctrine" as a powerful curb on federal regulators, saying the president needs clear congressional authorization before taking actions that have sweeping political and economic significance.

The biggest issue for opponents has been establishing standing to sue — that is, showing they are being directly harmed by the policy. A federal appeals court said the states had standing because of the impact on the Missouri Higher Education Loan Authority, a state-created loan servicer that could lose many of its accounts. 

MOHELA, which isn't involved in the case, by law must contribute to a fund Missouri uses to pay for projects at public colleges.

The cases are Biden v. Nebraska, 22-506, and  Department of Education v. Brown, 22-535.

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