\n<\/p>\n
A<\/span>s a presidential candidate, Joe Biden promised to cancel $10,000 in student debt per borrower. He called this a \u201ccritical step\u201d to \u201chelp make it easier for working people to make ends meet.\u201d But after winning office, Biden found it difficult to get this passed into law, given his party\u2019s razor-thin majority in the Senate. Congress on several occasions considered including $10,000 in debt relief in multiple pieces of COVID-19 legislation and ultimately chose not to do so. <\/p>\n It seemed his hands were tied. Even most Democrats, including then-House Speaker Nancy Pelosi (D-CA), had long acknowledged<\/a> that student debt cancellation couldn\u2019t be done without passing a law. Actions to \u201ccancel\u201d student debt actually involve spending taxpayer money or requiring that taxpayers absorb the reallocated debts, and Congress has the power of the purse per the Constitution. <\/p>\n Then, a few radicals on the Democratic Party\u2019s left flank, namely Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT), reminded Biden of the precedent his old boss, Barack Obama, had set. Also stymied by an unhelpful Congress, Obama famously turned to \u201cpen and phone\u201d governance on everything from immigration reform to public school bathrooms, sidestepping the first branch and the Constitution in favor of unilateral executive action. Progressives lobbied Biden to do the same, making the specious and legally radical argument that the president had the authority to \u201ccancel\u201d student debt unilaterally with simply an executive order. <\/p>\n Thus, last August, the White House unveiled its unilateral plan to enact partial student debt cancellation. \u201cA post-high school education should be a ticket to a middle-class life, but for too many, the cost of borrowing for college is a lifelong burden that deprives them of that opportunity,\u201d the president said, adding that he was \u201cfollowing through on his promise\u201d and \u201ccanceling\u201d $10,000 per borrower. But the initiative actually went even further than what Biden had promised during the campaign. It also included $20,000 in cancellation for graduates who had received Pell Grants, a form of federal financial aid, and a sweeping income-driven repayment reform<\/a> that would mean hundreds of billions in additional debt relief. <\/p>\n \u201cWhat President Biden has in effect decided to do is to take from working-class people,\u201d Sen. Ted Cruz (R-TX) said<\/a>. \u201cTo take from truck drivers and construction workers right now, thousands of dollars in taxes in order to redistribute it to college graduates who have student loans.\u201d <\/p>\n \u201cPresident Biden\u2019s announcement that he intends to cancel student loan debt is irresponsible, unfair, and deeply cynical,\u201d then-Sen. Richard Burr (R-NC) similarly argued<\/a> in a statement. \u201cHe’s asking taxpayers to subsidize debt held by some of America\u2019s highest earners in order to court votes. Every American who paid back their student loans, who put themselves through school by saving and working extra jobs, or who chose not to go to college at all should be outraged right now.\u201d <\/p>\n Nor was it only conservatives who were unhappy with Biden\u2019s move. Even former Obama administration economist Jason Furman blasted<\/a> it as \u201creckless\u201d and warned it would worsen inflation. Meanwhile, the centrist, nonpartisan Committee for a Responsible Federal Budget analyzed<\/a> the plan and estimated it would cost roughly $500 billion, an astounding $3,489 per federal taxpayer. It also warned that it would do nothing to actually solve the student debt problem, with debt returning to current levels by 2028. <\/p>\n The other big criticism of student debt \u201ccancellation\u201d generally is that it benefits primarily affluent people. The president attempted to negate this criticism by cutting off his relief at those who earn $125,000 individually or $250,000 as a household. But even still, the benefits overwhelmingly flow to college-educated, above-average earners. <\/p>\n An analysis<\/a> by the Wharton School at the University of Pennsylvania found that Biden\u2019s plan would still give up to 73% of the benefits to the top 60% of earners. A simpler way to think of it is that the vast majority of the loan forgiveness benefits would not<\/i> go to the bottom 40%, those who are the actual poor and working class. <\/p>\n The legal community also took umbrage with Biden\u2019s initiative due to its flimsy constitutional justifications. The president\u2019s order claimed that he had the ability to cancel half a trillion dollars in debt due to a 2003 law, the HEROES Act, that was passed in the wake of 9\/11. As law professor Ilya Somin has explained, this law gives the secretary of education the authority to \u201cwaive or modify any statutory or regulatory provision applicable to the student financial assistance programs\u201d so that during a national emergency, \u201caffected individuals\u201d are not hurt financially by the crisis. <\/p>\n Even 2 1\/2 years into it, the White House is using COVID-19 as its \u201cemergency\u201d and defining \u201caffected individuals\u201d to include pretty much the entire country. The big problem, however, is that the law requires people to be financially hurt by the emergency at hand, and most of Biden\u2019s student debt relief recipients simply weren\u2019t. Indeed, the unemployment rate for college graduates is now back to just 2%. <\/p>\n More broadly, no one<\/i> believes that Congress intended to authorize the executive branch to enact unilateral debt cancellation when it passed this law. That\u2019s why Somin dubbed this feeble attempt at a rationale \u201cblatantly pretextual.\u201d <\/p>\n Even many liberal legal scholars have critiqued the Biden administration\u2019s attempt to exploit emergency powers. \u201cAs a progressive who was deeply disturbed by the Trump administration’s abuse of power and executive power and invoking emergency powers, like building a wall, it seems too convenient now for progressives to embrace emergency power references by a new president, when we were so troubled a few years ago,\u201d Fordham University law professor Jed Shugerman said<\/a>. \u201cWhat\u2019s good for the goose is good for the gander. We should be tired of the use of emergency powers.\u201d <\/p>\n Elizabeth Goitein of the left-leaning Brennan Center for Justice made a similar criticism of Biden\u2019s plan. \u201cEmergency powers are not meant to address long-standing problems, however dire,\u201d she wrote<\/a> for the Washington Post<\/i>. \u201cNor are they meant to provide long-term solutions. And using them to get around Congress, when Congress has considered a course of action and rejected it, is a clear misuse of emergency powers.\u201d <\/p>\n \u201cFundamentally, sidelining Congress through emergency powers means sidelining the checks and balances that safeguard our liberties and democracy,\u201d Goitein concluded. \u201cNo matter your view of the merits of student debt forgiveness, that\u2019s an outcome that should trouble us all.\u201d <\/p>\n The takeaway here is clear: Biden\u2019s debt relief effort is built on a house of cards. <\/p>\n With so many problems plaguing the plan, it\u2019s hardly shocking that it was deeply unpopular with the public \u2014 once it was presented with the full facts. Pollsters at the libertarian-leaning Cato Institute surveyed<\/a> people on a plan very similar to Biden\u2019s, and the results were glaring. <\/p>\n \u201cNearly two\u2010thirds of Americans oppose cancellation if forgiving $10,000 per borrower raises their taxes (64%) or if it primarily benefits higher income people (68%),\u201d Cato reported<\/a>. \u201cAbout three\u2010fourths of Americans would oppose student debt cancellation if it caused universities to raise their tuition and fees (76%) or if it caused more employers to require college degrees even if not needed to do the job (71%), also known as \u2018credential inflation.\u2019\u201d <\/p>\n Basically, once you inform people of the actual trade-offs involved with \u201ccanceling\u201d student debt, support for Biden\u2019s plan plummets. <\/p>\n The Biden administration certainly knew its initiative was on shaky legal ground. However, it had also anticipated this from the start and maneuvered accordingly. Thanks to the way the administration had structured the debt cancellation, it wasn\u2019t clear if anyone would actually be able to challenge its constitutionality in court. This is because it was initially hard to see what plaintiffs, that is, litigants, would have the legal standing to sue over it. After all, not just anybody can sue the government for any reason in order to challenge a given policy. <\/p>\n \u201cUnder current Supreme Court precedent, plaintiffs have to meet three requirements to get standing to file a lawsuit in federal court: They must 1) have suffered an \u2018injury in fact,\u2019 2) the injury in question must be caused by the allegedly illegal conduct they are challenging, and 3) a court decision should be able to redress the injury,\u201d Somin explained<\/a> for the Volokh Conspiracy<\/i>. <\/p>\n \u201cThe main potential stumbling block in this case is the requirement of \u2018injury in fact,\u2019\u201d he continued. \u201cIt may be difficult to prove that student loan cancellation injures anybody, in the sense required by Supreme Court precedent. Canceling some of A\u2019s student loan debt doesn\u2019t necessarily injure B and C. The others may believe it is unfair they had to pay off all their loans themselves, while A doesn\u2019t. But, with rare exceptions, current precedent requires some sort of tangible injury. Unfairness, by itself, isn\u2019t enough.\u201d <\/p>\n Yet couldn\u2019t taxpayers sue? They\u2019re the ones being taken advantage of by all this, after all. But no: Under precedent, general taxpayer injury is not considered sufficient standing to challenge a policy in court. <\/p>\n Multiple lawsuits have emerged since Biden\u2019s student loan cancellation policy was announced, taking several different angles to challenge its constitutionality. The best hope of stopping Biden\u2019s plan seems to lie with a lawsuit from several red states that\u2019s set to be argued before the Supreme Court next month. <\/p>\n In September, a coalition of six states with Republican-led governments, Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina, sued to block the plan in federal court. Initially, they lost in the district court, with a federal judge ruling that they lacked standing. The 8th U.S. Circuit Court of Appeals then took the case and issued an injunction blocking the cancellation from going into effect, finding that the states likely did have standing and raised \u201cimportant and significant challenges\u201d to the plan\u2019s legality. <\/p>\n The case, Biden v. Nebraska<\/a><\/i>, now goes before the Supreme Court, which will hear arguments on it in February. It will first rule on whether the states have standing and then, if they do, on whether the plan is within the executive branch\u2019s constitutional authority. If the states are found to have standing, it\u2019s expected that the Supreme Court\u2019s 6-3 conservative majority will strike down Biden\u2019s plan given its shaky constitutional foundations: It just has to get over that crucial legal hurdle first. <\/p>\n The states argue that they do have standing for several key reasons. Primary among them is that the mass cancellation of debt will adversely affect the finances of state loan servicing agencies that are effectively part of the state government, such as the Missouri Higher Education Loan Authority. <\/p>\n \u201cThe Cancellation will unquestionably inflict financial harm on MOHELA,\u201d their lawsuit argued<\/a>. \u201cLast fiscal year, MOHELA earned $88.9 million for \u2018servicing 5.2 million\u2019 Direct Loan accounts. This revenue is determined by how many accounts MOHELA services \u2014 the more it does, the more it earns \u2014 and the Cancellation will \u2018completely\u2019 eliminate the debt of nearly half of all borrowers. MOHELA is at risk of losing<\/i><\/b> at least half of the Direct Loan accounts it services, which equates to millions of dollars of revenue per year<\/i><\/b>.\u201d <\/p>\n This thus establishes the \u201cinjury in fact\u201d a litigant needs to have in standing to sue. Somin views this as the strongest argument for standing, writing<\/a> that \u201cloan servicers like MOHELA pretty obviously have standing under even a narrow interpretation of current precedent.\u201d <\/p>\n The plaintiffs also argue that some of the other states, namely Nebraska, Iowa, Kansas, and South Carolina, have standing because they face \u201cdirect injury in the form of a loss of specific tax revenues.\u201d The arguments on behalf of each of these states are too complex to explore here, but essentially, they maintain that cancellation will mean that fewer taxes are paid to the state governments and argue that loss of revenue gives them standing. <\/p>\n The Biden administration argued in response that MOHELA is its own legal entity and the state of Missouri cannot sue on its behalf. It also argued that if MOHELA is not truly a part of Missouri\u2019s government, the mere fact that it owes money to the state and its ability to pay may be adversely affected is not enough to establish standing. <\/p>\n