Biden v. Nebraska, 143 S. Ct. 2355

Background

Title IV of the Higher Education Act (HEA) authorizes limited, specifically defined loan discharges; the HEROES Act (2003) permits the Secretary of Education to “waive or modify” statutory or regulatory provisions under Title IV in connection with a presidentially declared national emergency to ensure affected borrowers are not placed in a worse financial position.
In 2022 the Secretary invoked the HEROES Act to create a broad loan-cancellation program: up to $10,000 per eligible borrower (up to $20,000 for Pell recipients), covering roughly 43 million borrowers and an estimated $430 billion in principal cancellation.
Six States sued, challenging that the Secretary exceeded statutory authority; the Eighth Circuit issued a nationwide preliminary injunction. The case reached the Supreme Court by certiorari before judgment.
Missouri claimed Article III standing based on injury to MOHELA, a state-created nonprofit instrumentality that services federal student loans and would lose servicing fees under the program.
The Government defended the program as a lawful exercise of the HEROES Act waiver/modification authority and, alternatively, as consistent with congressional purpose to grant broad emergency discretion; the Court considered both ordinary statutory interpretation and the major-questions line of precedents.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing: whether Missouri may sue based on harm to MOHELA	Missouri: MOHELA is a state instrumentality; injury to it (lost servicing fees) is a direct injury to the State	Government: MOHELA is a separate legal person and could sue on its own; Missouri lacks a concrete injury	Held: At least Missouri has standing—MOHELA is a state instrumentality and harm to it is an injury to Missouri (Article III satisfied)
Statutory scope: whether HEROES Act authorizes mass principal cancellation	States: HEROES Act authorizes limited, emergency-focused waivers/modifications, not sweeping cancellation of $430B principal	Government: "waive or modify any" provisions plus ability to publish "terms and conditions in lieu of" allows broad relief to address COVID harms	Held: The statutory text does not authorize wholesale rewrite; "modify" implies limited changes and cannot support creation of a new, massive cancellation regime
Waiver vs modification: whether combination permits creating new substantive program	States: Even read together, waiver/modification cannot be used to abrogate statutory scheme and substitute a new nationwide forgiveness program	Government: ‘‘Waive or modify’’ plus ‘‘in lieu of’’ reporting empowers Secretary to eliminate or replace statutory terms to the extent necessary	Held: Neither waiver nor modification (alone or in combination) supports the Secretary’s program; replacing terms is limited by the scope of "modify"
Major-questions / deference: whether agency may rely on broad emergency delegation for economically significant action	States: Because the action is economically and politically momentous, clear congressional authorization is required	Government: HEROES Act’s emergency delegation was intended to grant broad discretion to respond to unforeseen crises, including COVID	Held: Major-questions considerations reinforce that Congress did not clearly authorize the Secretary to enact such sweeping cancellation; Court requires clear authorization and finds none

Key Cases Cited

United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (syllabus authority on syllabi not part of opinion)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires concrete, particularized injury fairly traceable to defendant and redressable)
Arkansas v. Texas, 346 U.S. 368 (State may sue for injury to an official state instrumentality)
Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (a government-created instrumentality can be treated as part of the Government for many purposes)
MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218 ("modify" connotes moderate or incremental change; courts should resist construing minor-word delegations to authorize fundamental statutory transformations)
FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (context and the statute’s historical/political background can defeat an agency’s expansive claim of authority)
Utility Air Regulatory Group v. EPA, 573 U.S. 302 (major-questions principle: agencies need clear congressional authorization for decisions of vast economic and political significance)
King v. Burwell, 576 U.S. 473 (refusal to defer to agency on a question of deep economic and political significance affecting large-scale spending)