What to watch as the Supreme Court takes up Biden’s student debt relief

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Feb 27, 2023 View in browser   By Michael Stratford Presented by the Council of Chief State School Officers BIDEN’S STUDENT DEBT RELIEF GETS ITS DAY IN COURT: The Supreme Court this week will hear oral arguments in two cases that will decide the fate of President Joe Biden’s plan to cancel student loan debt. Here’s our guide to watching Tuesday’s student loan showdown at the high court: U.S. Supreme Court | Francis Chung/POLITICO — A $400 billion question: The stakes are high for the Biden administration and the tens of millions of Americans it has promised up to $10,000 or $20,000 of student debt relief. The Education Department estimates that more than 40 million borrowers could qualify for the program, which it expects will cost some $379 billion, though other estimates are higher. Last fall, more than 25 million borrowers submitted applications and some 16 million were approved before the administration was forced to shut down the program in response to court orders. Those applications came from nearly every corner of the country, as POLITICO mapped out earlier this month. —Standing, standing, standing: A key part of both cases will be whether the group of Republican-led states and the two Texas student loan borrowers challenging the plan have the right to bring their lawsuits in the first place. The Biden administration is hoping — and asking — the Supreme Court — to toss the cases outright on the grounds that the challengers are not actually injured by the Education Department doling out debt relief. The GOP states, led by Nebraska and Missouri, have various arguments about how debt relief will injure their various states. But lower courts have focused most heavily on Missouri’s claim that it will suffer losses because the Missouri Higher Education Loan Authority, a state-created entity, will have fewer loans to collect under its contract with the Education Department. The two Texas borrowers, who were partially or fully excluded from the program, say that they should be able to sue because they were deprived of the opportunity to provide feedback to the Education Department on the plan. —Scrutiny of the HEROES Act: Beyond the standing question, the Supreme Court has already indicated it’s at least going to debate the merits of the case: whether debt relief is legal. Expect to hear a lot about the 2003 HEROES Act, the law that the Biden administration is invoking to cancel debt. Republican and Democratic architects of the bipartisan law have each submitted dueling amicus briefs about whether Congress intended for the HEROES Act to be used for the type of mass debt relief the Biden administration is proposing. The law says that the Secretary of Education may “waive or modify any statutory or regulatory provision” related to federal student loans “as may be necessary to ensure that” borrowers “are not placed in a worse position financially” because of a national emergency. Covid-19 is such an emergency, the administration contends. And canceling debt for most borrowers will help avoid a surge of delinquencies and defaults when payments resume for the first time since the pandemic began, the administration argues. The GOP states counter that the program “rests on a tenuous and pretextual connection to a national emergency.” And in any event, they argue, the administration is seeking to make many borrowers much better off, not merely guarding against the chance they’re in a “worse” financial position because of the pandemic. —A skeptical court: The administration is presenting its case before a Supreme Court that’s already shown hostility to some of his other high-profile pandemic-era policies. It struck down, for instance, Biden’s workplace Covid vaccine rule and his administration’s extension of the eviction moratorium. More broadly, the Republican appointees on the court have come out strongly against administrative powers. They struck down an EPA climate policy earlier this year in a landmark case that reined in agency powers and that is heavily cited by the opponents of the debt relief plan. —The logistics: The court will hear each case for an hour, starting at 10 a.m. (live audio here). Solicitor General Elizabeth Prelogar will argue on behalf of the administration. Nebraska Solicitor General James Campbell will represent the coalition of GOP states, and J. Michael Connolly, an attorney at the firm Consovoy McCarthy, will argue on behalf of the two Texas borrowers whose lawsuit was brought by a conservative advocacy group. —The potential fallout: The justices aren’t going to rule right away. The court is expected to issue its opinion in May or June. But progressive pressure on the Biden administration to come up with a fallback plan is likely to ratchet up in the coming months, especially if enough justices signal at oral arguments that they’re leaning towards ruling against debt relief. IT’S MONDAY, FEB 27. WELCOME TO MORNING EDUCATION. Please send tips and feedback to your host at mstratford@politico.com or to my colleagues: Mackenzie Wilkes at mwilkes@politico.com, Juan Perez Jr. at jperez@politico.com and Bianca Quilantan at bquilantan@politico.com. Follow us on Twitter: @Morning_Edu and @POLITICOPro. A message from CCSSO: States are investing federal COVID-19 pandemic relief dollars in innovative and impactful ways — and the investments are beginning to pay off. From the nearly $19 billion allocated to state education agencies from K-12 relief funds, states are prioritizing investments in academic recovery, the teacher pipeline and mental health and wellbeing. Learn about the impact of ESSER reserve investments in states across the country.    Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories. Student Loans MAJOR ‘BORROWER DEFENSE’ SETTLEMENT MOVES AHEAD: A federal judge on Friday allowed the Education Department to begin discharging billions of dollars of federal student loans owed by hundreds of thousands of borrowers who claim they were defrauded by their college. — Judge William Alsup of the Northern District of California ruled that the Biden administration could move ahead with providing the vast majority of loan forgiveness that’s part of a major class-action settlement over “borrower defense” claims. More than 200,000 borrowers are in line to receive some $6 billion worth of relief. — Alsup had previously approved the settlement over the objections of several colleges that said it was unfair and illegal. But three of those schools had asked him to prevent the settlement from moving forward while they appeal to the 9th Circuit Court of Appeals. — Alsup ruled on Friday that loan discharges for most of the borrowers covered by the settlement can go forward. But he ordered the Education Department to hold off on granting the relief to borrowers who attended the schools that are appealing: Lincoln Educational Services Corp., American National University, and Everglades College, Inc. —The Education Department previously said that it was ready to carry out the relief. Michael Garry, a department official overseeing the borrower defense program, said in a court filing earlier this month that the agency was prepared to “promptly” notify borrowers and deliver their loan discharges if the judge gave the green light.   We’re spilling the tea (and drinking tons of it in our newsroom) in U.K. politics with our latest newsletter, London Playbook PM. Get to know all the movers and shakers in Westminster and never miss a beat of British politics with a free subscription. Don’t miss out, we’ve got some exciting moves coming. Sign up today.     Higher Education ACCREDITATION ADVISORY PANEL CONVENES: The federal panel that advises the Education Department on accreditation issues and recommends whether to keep federal recognition of accrediting agencies will convene this week for its biannual meeting. — On the agenda: The panel, the National Advisory Committee on Institutional Quality and Integrity will elect a chair and vice chair for three-year terms. Art Keiser, the chancellor and CEO of Keiser University, has held the role of chair for the past two terms. Claude Pressnell, president of Tennessee Independent Colleges and Universities Association, has served as vice chair for a term.  — The panel will discuss some of the nation’s largest accreditors: The Higher Learning Commission, Middle States Commission on Higher Education, and New England Commission of Higher Education, and WASC Senior College and University Commission.   A message from CCSSO:   Syllabus — Supreme Court Justice Clarence Thomas wrote of ‘crushing weight’ of student loans: The Associated Press. — Nebraska conservatives set sights on education takeover: The Associated Press. — University of Idaho to demolish off-campus home where 4 students were killed: NPR. — Despite K-12 reading gains, new literacy results were flat for 3rd grade “Covid kids”: The 74. — Career-training companies scoop up federal funds with little oversight: The Washington Post.   JOIN POLITICO ON 3/1 TO DISCUSS AMERICAN PRIVACY LAWS: Americans have fewer privacy rights than Europeans, and companies continue to face a minefield of competing state and foreign legislation. There is strong bipartisan support for a federal privacy bill, but it has yet to materialize. Join POLITICO on 3/1 to discuss what it will take to get a federal privacy law on the books, potential designs for how this type of legislation could protect consumers and innovators, and more. REGISTER HERE.     A message from CCSSO: Equipped with nearly $19 billion of ESSER funds set aside for state use, state education agencies are supporting schools and districts to bring evidence-based practices such as high-impact tutoring to scale. These investments are beginning to pay off. In Colorado, High-Impact Tutoring Grant recipients provided more than 35,000 hours of tutoring in the 2021-22 school year. In West Virginia, nearly 30,000 students were reached through the Summer SOLE program, demonstrating gains on ELA and math assessments. Learn about the impact of ESSER state reserve investments.     Follow us on Twitter Delece Smith-Barrow @DeleceWrites Michael Stratford @mstratford Bianca Quilantan @biancaquilan Juan Perez Jr. @PerezJr Mackenzie Wilkes @macwilkes   Follow us

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