Biden’s Student Loan Drubbing – WSJ

One plaintiff was ineligible for debt forgiveness because her loans are commercially held. The other is ineligible for the full $20,000 in relief because he didn’t receive a Pell Grant. Both say they couldn’t express disagreement with the Administration’s plan because it didn’t undergo notice and comment under the Administrative Procedure Act.

The Administration says no one has standing to challenge the loan cancellation because nobody is concretely harmed when the government grants a benefit. Not so, Judge Pittman ruled. He cites a 1993 Supreme Court decision that an association of contractors had legal standing to challenge a local Florida ordinance favoring minority-owned business.

In the student loan case, plaintiffs’ injury is that “they personally did not receive forgiveness and were denied a procedural right to comment on the Program’s eligibility requirements. Plaintiffs need to prove only the existence of an associated ‘concrete interest,’ not a guarantee of concrete harm due to the procedural violation,” the judge writes.

The question of legal standing is tricky. But the Court’s standing jurisprudence has been somewhat flexible, as Justices

Clarence Thomas

and

Neil Gorsuch

noted last year in a dissent. The Court allowed Democratic states to challenge the Trump Census citizenship question despite injuries that were speculative.

There’s a much stronger argument for letting the challenge to loan cancellation proceed since the constitutional violation is so egregious. The Administration says the 2003 Heroes Act grants the Education Secretary authority to “waive or modify” any student financial aid provision he deems “necessary” in connection to a war or national emergency.

Covid is a national emergency, the Administration claims, so it can waive the obligation to repay federal loans across the board. This is doubtful, Judge Pittman writes, noting that Mr. Biden declared only weeks after his loan cancellation announcement that the “pandemic is over.”

Judges have often deferred to administrative agencies’ interpretation of their statutory authorities under the Court’s

precedent. “In recent years, however, the Supreme Court has chipped away at Chevron—giving back ‘the benefit of doubt about the meaning of an ambiguous law to the individual’ instead of the government,” Judge Pittman writes.

He adds: “The most recent example of Chevron’s fall is the crystallization of the long-developing major-questions doctrine in West Virginia. v. EPA (2022).” This doctrine requires a federal agency to point to “clear congressional authorization” when resolving a question of major political and economic import, which the loan write-off clearly is.

Because the Administration could not, Judge Pittman held it violates the separation of powers and vacated it. The Justice Department will no doubt appeal. Meanwhile, the Eighth Circuit Court of Appeals is considering a challenge by GOP states to the write-off. Let’s hope one or both reach the Supreme Court.