In 2022, the Biden administration announced a significant plan to forgive federal student loan debt, a move that quickly became the subject of intense legal scrutiny, culminating in the Supreme Court case *Biden v. Nebraska*. This case centered on the administration's authority to implement such a widespread debt cancellation program. The origins of this legal challenge trace back to campaign promises, executive actions, and immediate lawsuits filed
by various states and individuals who questioned the legality and scope of the proposed forgiveness.
Presidential Promises and Executive Action
The idea of federal student loan forgiveness was a key part of Joe Biden's presidential campaign in 2020. During his campaign, Biden pledged to cancel up to $10,000 of federal student loan debt for each borrower. After his election, he initially called upon the 117th U.S. Congress to pass legislation that would facilitate this $10,000 student loan forgiveness. However, by August 2022, the administration shifted its approach, announcing that it would use executive action to implement the debt relief.
This executive action outlined a plan to forgive $10,000 in student loans for individuals earning less than $125,000 annually, or $250,000 for married couples. An additional $10,000 in forgiveness was offered to recipients of Pell Grants. The Biden administration cited the Higher Education Relief Opportunities For Students (HEROES) Act as the legal foundation for this executive authority. Specifically, the administration pointed to language within the HEROES Act that grants the U.S. Secretary of Education the power to "waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under Title IV" of the Higher Education Act of 1965. This authority was intended to ensure that "affected individuals" would not be placed in a worse financial position regarding their student aid, particularly those impacted by a national emergency or disaster, or those suffering direct economic hardship due to war, military operations, or a national emergency.
Initial Legal Challenges by States
The Biden administration's student loan forgiveness program immediately faced legal opposition. On September 29, 2022, a coalition of six states—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina—filed a lawsuit in the Eastern Missouri U.S. District Court. These states argued that the forgiveness program violated the separation of powers doctrine and the Administrative Procedure Act. Their claim of standing to sue was based on several factors.
One key argument was that the American Rescue Plan Act of 2021 prevented them from taxing discharged loans for a period of three years, which they asserted would result in a loss of revenue. Missouri, in particular, presented a specific argument for standing related to the Higher Education Loan Authority of the State of Missouri (MOHELA). MOHELA is a public entity that the state contended would suffer a loss of revenue due to student loan forgiveness, thereby diminishing its ability to fund Missouri's student financial aid program. Initially, on October 20, 2022, District Judge Henry Autrey dismissed this suit, ruling that the states lacked standing to sue. However, the states appealed this decision, and on November 14, 2022, the U.S. 8th Circuit Court of Appeals granted an injunction, effectively pausing the program pending the appeal.
Challenges from Individual Borrowers and Advocacy Groups
In addition to the state-led lawsuits, the student loan forgiveness program also faced a separate legal challenge from individual borrowers. On October 10, 2022, two student loan borrowers who did not meet the eligibility criteria for the proposed debt forgiveness filed a lawsuit in the Northern Texas U.S. District Court. These borrowers sought to have the student loan forgiveness program vacated. Their argument for standing was rooted in their inability to formally voice their disagreement with the program through a notice-and-comment rulemaking process, which they asserted was required by the Administrative Procedure Act.
This lawsuit was supported by the Job Creators Network, a conservative advocacy organization. On November 10, 2022, District Judge Mark Pittman issued an order that struck down the student loan forgiveness program. The U.S. Department of Education appealed this decision, but on November 30, 2022, the U.S. 5th Circuit Court of Appeals declined to issue a hold on Judge Pittman's order. These various legal challenges ultimately set the stage for the Supreme Court's review of the Biden administration's student loan forgiveness initiative.
