Student Loan Forgiveness An Exercise In Unconstitutional Overreach

There Are 1.7 Trillion Reasons To End The Department Of Education

Few issues typify the damage done by that exercise in Constitutional intemperance known as the Department of Education than the nation’s $1.7 Trillion in student loan debt¹, and the White House effort to cancel a large portion of that debt.

Biden introduced the plan in August 2022 in a move that critics decried as a constitutionally dubious attempt to shore up Democrats’ fortunes ahead of the November 2022 congressional elections. While the Congressional Budget Office said the plan could cost about $400 billion, the Wharton School at the University of Pennsylvania estimates the price tag could exceed $1 trillion.

Opposition to the White House loan forgiveness program has spawned two cases which have made it all the way to the Supreme Court: Joseph R. Biden, President of the United States v. Nebraska² and Department of Education v. Myra Brown³, for which oral arguments were heard yesterday.

Calling the plan “constitutionally dubious” is being kind. A plain reading of the relevant statute shows that even if the Department of Education were Constitutionally capable of granting and administering packages of loans to America’s college students—which it is not—it has been given no statutory authority upon which it may rely for unilateral forgiveness of any portion of those loans.

As readers are aware, my take on the Department of Education echoes that of Congressman Thomas Massie (R-KY4): The Constitution does not give the federal government any authority over education.

Congressman Massie's Perennial Tilting At The Department Of Education Windmill

The Department of Education is but one example of government excess at the Federal level. Terminating the Department of Education would be one step towards reining in the Federal government and putting a stop to that excess.

It should surprise no one that I therefore do not consider the Department of Education to have any authority to loan out US taxpayer dollars to prospective college students—nowhere in Article I, Section 8 of the Constitution is there any text which plausibly gives either the Congress or the Executive Branch this authority.

Without Constitutional authority, the entire edifice of government-backed student loans is simply unconstitutional and unlawful. It does not matter how well-intentioned student loan programs are or might be; without Constitutional authority they are something the federal government may not lawfully do, period.

This is exactly what is meant in Article VI of the Constitution, which declares it to be the supreme law of the land.

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

This is exactly what Chief Justice John Marshall laid out in Marbury v Madison:

Certainly all those who have framed written Constitutions contemplate them as forming the fundamental and paramount law of the nation, and consequently the theory of every such government must be that an act of the Legislature repugnant to the Constitution is void.

Not only is the Department of Education an unconstitutional department, therefore, but so, too, is both its granting of $1.7 Trillion in student loan debt and its proposal to arbitrarily forgive and write off as much as $1 Trillion of that debt.

Lack of Constitutionality, of course, has never stopped any Administration from pursuing unlawful objectives by unlawful means.

While neither case tackles the Constitutionality of the Department of Education itself (which is a shame, as it would give the Supreme Court a chance to rectify that grotesque Congressional error), in Biden v Nebraska the operative question is the Department’s authority to forgive student loans.

In defending the Department’s authority, the government presents two arguments: 1) that the states which are parties to the case lack proper standing to sue⁴ in this matter; and 2) that the Department of Education has statutory authority to forgive student loans under the 2003 HEROES Act⁵.

This Court should vacate that injunction. Respondents lack standing to challenge the plan. On the merits, the plan falls squarely within the plain text of the Secretary’s statutory authority.

“Standing” is an essential element of Constitutional jurisprudence, as it defines what cases the Federal court system is empowered to hear.

Standing as a doctrine is composed of both constitutional and prudential restraints on the power of the federal courts to render decisions, and is almost exclusively concerned with such public law questions as determinations of constitutionality and review of administrative or other governmental action.

Where litigants lack standing, the necessary course of action for the courts is to dismiss the case.

The statutory authority claimed by the Department of Education arises from one of many post-9/11 pieces of legislation passed as the government wrestled with the ramifications of a “war on terrorism”, the Higher Education Relief Opportunities for Students Act of 2003 (PL 108-76), generally referenced as “the HEROES Act”. Specifically, the statute grants the Department of Education the following authority:

(a) Waivers and Modifications.--
            (1) In general.--Notwithstanding any other provision of law, 
        unless enacted with specific reference to this section, the 
        Secretary of Education (referred to in this Act as the 
        ``Secretary'') may waive or modify any statutory or regulatory 
        provision applicable to the student financial assistance 
        programs under title IV of the Act as the Secretary deems 
        necessary in connection with a war or other military operation 
        or national emergency to provide the waivers or modifications 
        authorized by paragraph (2).

Note that actual debt cancellation and forgiveness is not mentioned at all within the statute.

The “national emergency” upon which the White House loan forgiveness program rests is, of course, that declared by President Trump in 2020 at the start of the COVID-19 pandemic⁶.

The states which are parties to the case argue that the impact of the loan forgiveness program upon state agencies—specifically The Higher Education Loan Authority of the State of Missouri (MOHELA)—as well as state tax revenues gives the states the needed standing to sue, and that the White House program contorts the authorities of the 2003 HEROES Act beyond all reason.

During oral argument, several of the Justices expressed skepticism about the government’s position that “waiver” and “modification” plausibly include “cancellation”.

Justice Clarence Thomas posed that question directly:

So would you take a minute to explain how a waiver or modification amounts to a waiver -- to a cancellation?

The government’s response was that the Secretary of Education had “waived” the eligibility requirements for discharge of the student loan debt.

And I think the straightforward way to think about how the verbs map onto the Secretary's action is that he waived elements of those provisions that contain
eligibility requirements for discharge and cancellation that are inapplicable under this program and then modified the provisions to contain the limitations that he had announced as part and parcel of announcing this loan forgiveness.

Chief Justice Roberts was in rare form in challenging the government’s logic.

But, in an opinion we had a few years ago by Justice Scalia, he talked about what the word "modify" means, and he said modified in our view connotes moderate change. He said it might be good English to say that the French Revolution
modified the status of the French nobility, but only because there's a figure of speech called understatement and a literary device known as sarcasm.

In the related case, Department of Education v Myra Brown, the question of standing is again raised, as well as the statutory authority of the Department of Education to forgive student loans pursuant to the emergency powers of the 2003 HEROES Act.

The arguments put forward by the government regarding the Department’s statutory authority are largely the same as in Biden v Nebraska.

Congress charged the Secretary with administering federal student-loan programs. Because borrowers who default on their student loans face severe financial consequences -- including wage garnishment, long-term credit damage, and ineligibility for federal benefits -- Congress specifically authorized the Secretary to waive or modify any applicable statutory or regulatory provision as he deems necessary to ensure that borrowers affected by a national emergency are not worse off in relation to their student loans.

The respondent in this case, Myra Brown, asserts that she does have standing because the White House program specifically excluded loans which are commercially held, as hers happen to be. Ms. Brown specifically points out the legal requirements of the rule-making process, which the White House circumvented in this instance.

Here, the Department is pursuing a program of debt forgiveness and Respondents want their debts forgiven too. Resp. App’x 28, 31. Under the APA and the HEA, Respondents should have had an opportunity to express their views through the rule-making process. But the Department deprived Respondents of their “procedural right[s] to protect [their] concrete interests” by adopting the Program without negotiated rulemaking and notice and comment.

On the standing issue in Brown, the government’s position in oral argument is that the respondents are making an irrational claim, for which they cannot possibly have standing.

Across the board, Brown and Taylor's arguments in this case run counter to precedent and principle. On standing, Respondents' asserted injury is a complete mismatch for the relief they seek. They claim to want greater loan forgiveness than the plan provides, but they ask this Court to hold that the HEROES Act doesn't authorize loan forgiveness at all.

A win on that theory would mean that no one could get any HEROES Act relief, not
Brown, who would get nothing for herself, not Taylor, who would lose $10,000, and not any of the millions of borrowers who need this critical relief. Respondents lack standing to seek that result.

Justice Thomas was again first out of the gate questioning the government’s logic on standing.

Are there any instances in which you would have procedural standing?

The government’s response, interestingly enough, was that Myra Brown could have standing, had she worded her case differently.

So I think that if they wanted to argue that the Secretary should have reconsidered his decision under the HEROES Act to grant broader relief, then it's possible that they could have raised both a procedural claim and a substantive claim because, at that point, their injury would be redressable. They would be saying that the Secretary drew arbitrary lines, that the plan should be expanded to include them and to provide relief to them, and that would be a very straightforward route to making the arguments if what they really want is loan forgiveness.

Chief Justice Roberts also expressed skepticism about the government’s arguments on standing.

I understand your argument on standing, and I know this isn't directly on point, but, when I saw it, it's sort of like the equal protection cases, you know, where discrimination between men and women on the level of pensions and the women -- widows get more and the widowers get less, and the challenge is brought and the argument was, well, if you win, we're going to take the excess away
from the -- the widows, so you're not going to get anything, so you don't have standing.

Why is that case -- I appreciate the way in which it's different, but why isn't that at least some authority on which they can rely?

From my layman’s perspective, I’m not sure the government’s response helped their case, as it seemed to be contradictory.

I think that the equal protection cases are fundamentally different because, there, your injury is your complaint of unequal treatment. And so, whether you level up or level down, your injury is being redressed. You're no longer being subject to unequal treatment, and, instead, everyone is being subject to the same treatment.

But this case stands in a very different posture because, here, their argument is our injury is we're not getting loan forgiveness, and the -- the relief they're seeking, which is a declaration that the HEROES Act doesn't authorize loan forgiveness in the
first place, doesn't redress that injury one bit.

However, a declaration that the HEROES Act doesn’t authorize loan forgiveness in the first place is exactly the sort of “leveling down” the government conceded in the same passage was a legitimate redress of grievance, despite the assertion to the contrary.

Intriguingly, Justice Ketanji Brown Jackson, the newest member of the Court and a Biden appointee, asked a question that seemed to question the intellectual honesty of the government’s position:

Can I just ask you, I -- I had understood them to be complaining about the procedures. Am I completely off base here? Are you suggesting that they are
complaining about not getting enough loan forgiveness or something? Maybe I misheard you, but I thought they were trying to bring a procedural claim in that the reason why this was problematic was because the procedures that they are saying are lacking are actually under the other source of authority, that they -- that if we looked at the source of authority that the Secretary used in this scenario, it doesn't
guarantee them those procedures, so you can't really complain about not getting procedures in another stat -- under another statute that was not invoked in -- in this situation.

Am I wrong about this?

My layman’s sense of the government’s response was that it was a bit weak.

The problem with that procedural theory of harm is that by their own arguments in
the case, the Secretary couldn't make a different decision. He couldn't go back to the drawing board and think about it and decide, yes, I'm going to expand the plan under the HEROES Act to provide these borrowers with relief too. So they aren't able to assert that kind of redressability for an asserted procedural injury under the HEROES Act.

The weakness in this line of reasoning is that it necessarily presumes that the loan forgiveness authority flows solely from the HEROES Act, and that there is no other legal mechanism for the Department of Education to forgive student loans, without directly refuting the equal protection argument that Justice Jackson was inferring.

However, this leads back to the same “leveling down” logic already conceded by the government: If the use of HEROES authority runs afoul of equal protection requirements, and that is the only authority accessible for student loan forgiveness, then the equitable result is that no one can have their student loans forgiven.

Both cases highlight the degree to which the Department of Education is an out-of-control unconstitutional monstrosity, and the cynicism with which the White House is willing to contort language to shoehorn their agenda into the first statute they find.

In order for the government position on the meanings of the words “waive” and “modify” to make sense, the term “waive” in particular has to employ a meaning which is completely at odds with the text of the 2003 HEROES Act—that of relinquishing a legal right.

to relinquish (something, such as a legal right) voluntarily

Viewed contextually within the HEROES Act, the more appropriate definition from Merriam-Webster is that of refraining from enforcement:

to refrain from pressing or enforcing (something, such as a claim or rule)

This is the definition that makes sense within the phrase “waive or modify any statutory or regulatory provision,” which is how the term is deployed within the Act.

Nor is there any definition of “modify” which can be taken as synonymous with elimination or cancellation, nor are any of the synonyms referenced in Merriam-Webster consistent with elimination or cancellation.

Additionally, it should not go without notice that the overall thrust of the 2003 HEROES Act is to provide student loan relief for members of the military called to active duty or who have their educational efforts disrupted as a result of deployments pursuant to war, military operations, or a declared national emergency. Expanding the authorities stated within the Act to encompass all student loan recipients is a fairly broad assertion of authority that, just on its own merits, is of dubious constitutionality.

The Constitutional reality of the matter is this: nowhere within the enumerated powers of Congress is there given an authority to loan money to anyone. The authority given Congress is to borrow, not to lend.

If there is no Constitutional authority to lend money, there can be no Constitutional authority to forgive the incurred debt. To argue otherwise opens the door to all manner of government corruption.

Additionally, it is fatuous, facile, and fundamentally dishonest to imply, as the White House does with the loan forgiveness program, that the student loan crisis is the result of the COVID pandemic. One need only do a search for articles written about the student loan crisis in 2019, before COVID was even in circulation, to see the error of that stance, or that the amount of student loan debt at the end of 2019 exceeded $1.6 Trillion.

The plain text of the HEROES Act connects the need for student loan relief to a declared war, military operation, or national emergency—which by definition excludes pre-existing demands for relief.

The government responses to the COVID pandemic have inflicted innumerable harms on people, but the spiraling levels of student debt cannot be counted among them, simply because that problem preceded the pandemic arguably by more than a decade.

The question is not whether offering debt relief on student loans is either equitable or just, but whether the government has any authority, either in statute or in the Constitution, to grant that relief.

The answer is that the government has no authority to grant debt relief at all. It didn’t have authority to disburse taxpayer dollars in such fashion in the first place, and it doesn’t have authority to choose not to collect those taxpayer dollars still owed and outstanding. There is no text of the Constitution nor the 2003 HEROES Act which plausibly gives the government that authority.

Ultimately, these cases give at least 1.7 trillion compelling reasons why Congressman Massie’s bill to eliminate the Department of Education should be passed into law.

1. Board of Governors of the Federal Reserve System (US), Student Loans Owned and Securitized [SLOAS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/SLOAS.

2. Joseph R. Biden, President of the United States, et al., v. Nebraska, et al. (Docket 22-506)

3. Department of Education, et al., v. Myra Brown, et al. (Docket 22-535)

4. Legal Information Institute. Standing Requirement: Overview. https://www.law.cornell.edu/constitution-conan/article-3/section-2/clause-1/standing-requirement-overview

5. "H.R.1412 - 108th Congress (2003-2004): Higher Education Relief Opportunities for Students Act of 2003." Congress.gov, Library of Congress, 18 August 2003, https://www.congress.gov/bill/108th-congress/house-bill/1412.

6. United States, Executive Office of the President [Donald Trump]. Proclamation 9994: Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak. 85 FR 15337, 18 March 2020.