Biden v. Nebraska
600 U.S. 477
| SCOTUS | 2023Background
- The Higher Education Act (Title IV) governs federal student loans and narrowly prescribes when the Secretary of Education may discharge loan principal (death, disability, bankruptcy, certain school misconduct, limited public‑service forgiveness programs).
- The HEROES Act (2003) authorizes the Secretary, during a presidentially declared national emergency, to “waive or modify any statutory or regulatory provision applicable to” Title IV programs as the Secretary deems necessary so affected individuals are not placed in a worse financial position because of the emergency.
- In 2022 the Secretary invoked the HEROES Act for COVID‑19 relief and announced a program cancelling up to $10,000 per borrower (up to $20,000 for Pell recipients) for borrowers under income thresholds; CBO estimated roughly $430 billion of principal would be cancelled and ~43 million borrowers affected.
- Six States challenged the program in the Eastern District of Missouri; the district court dismissed for lack of standing; the Eighth Circuit issued a nationwide preliminary injunction; the Supreme Court granted certiorari before judgment.
- The Supreme Court (majority) held Missouri had standing through MOHELA (a state‑created loan‑servicing instrumentality) and held the HEROES Act did not authorize the Secretary’s mass principal cancellation; the injunction therefore stood (case reversed and remanded to the district court on the prior dismissal).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing — can a State sue for economic harm to its public instrumentality (MOHELA)? | Missouri: MOHELA is an instrumentality of the State; lost servicing fees from cancellations cause a concrete injury to MOHELA that is necessarily an injury to Missouri. | United States: MOHELA is a separate legal entity; any injury belongs to MOHELA, which could and should sue on its own behalf, not the State. | Held: Missouri has standing. MOHELA is a public instrumentality sufficiently tied to the State (creation, control, public function); harm to MOHELA in performance of its public function is a direct injury to Missouri. |
| Statutory authority under the HEROES Act — does "waive or modify" permit mass debt cancellation? | States: The Act’s "waive or modify" language allows only modest, targeted changes; it does not permit creating a sweeping new debt‑forgiveness program that rewrites Title IV. | U.S.: The Act authorizes broad discretion in emergencies; "waive or modify," read together with authority to set "terms and conditions in lieu of" waived provisions, permits the Secretary to enact the program. | Held: The Act does not authorize the program. "Modify" ordinarily means moderate change; "waive" historically nullified specific requirements; together they do not permit wholesale substitution of a new statutory regime cancelling $430B of principal. |
| Major‑questions / clear‑statement principle — must there be clear congressional authorization for agency action of great economic and political significance? | States: Such major changes implicate separation‑of‑powers and require clear authorization from Congress; HEROES Act contains none. | U.S.: Congress intended broad discretion to the Secretary to address emergencies; the program fits that delegation. | Held: Major‑questions considerations apply; given the magnitude and novelty of the program and the lack of clear authorization, the Court declines to defer to the Secretary. |
| Scope of the Secretary’s ‘‘necessary’’ determination requirement | States: Cancellation exceeds what is "necessary" to ensure affected individuals are not worse off; less intrusive measures (forbearance, pauses) could suffice. | U.S.: Cancellation was reasonably determined necessary to address pandemic harms to low‑ and middle‑income borrowers. | Held: The Court’s statutory holding obviated reliance on necessity, but noted the Secretary would face a difficult burden demonstrating cancellation was "necessary" given prior, less intrusive pandemic measures. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires concrete, particularized injury)
- Arkansas v. Texas, 346 U.S. 368 (State may sue to protect injury to an official state instrumentality)
- Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (a government corporation can be a state actor for many purposes where it was created to serve public functions)
- MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218 (interpretation of statutory terms like "modify" considers ordinary meaning and limits—"modify" implies moderate change)
- Utility Air Regulatory Group v. EPA, 573 U.S. 302 (agencies cannot assert expansive authority on questions of vast economic and political significance without clear congressional authorization)
- Brown & Williamson Tobacco Corp. v. FDA, 529 U.S. 120 (context, history, and the magnitude of asserted agency power inform whether Congress authorized action)
- King v. Burwell, 576 U.S. 473 (declined to defer to agency on a question of major economic significance; statutory context matters)
- First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U.S. 611 (government corporations have separate legal personality; relevance in assessing instrumentality status)