WASHINGTON — Ellen Weber could cut some of the more than $100,000 she owes in student loans if President Joe Biden’s debt relief plan ever went into effect, but Republican officials in her home state of Missouri have worked hard to make sure that that doesn’t happen. happen.
Weber, 36, a therapist at a high school outside St. Louis, would be eligible for loan forgiveness of up to $10,000 under the proposal by Biden, who is facing a showdown in the US Supreme Court on Tuesday.
Your loan is administered by the Missouri Higher Education Loan Authority, known as MOHELA, which could play an important role in the litigation.
The judges will look at two different legal challenges to Biden’s plan, one of which involves Missouri. And part of the case will depend on whether the state of Missouri, sponsored by Republican officials, has the standing to challenge Biden’s proposal, given MOHELA’s role in servicing student loan debt and what it argues it would lose if the loans are forgiven. loans.
The state’s involvement does not sit well with Weber, who believes that Republican state officials, including newly appointed attorney general Andrew Bailey, have not considered the needs of state residents like her.
“It’s incredibly frustrating to hear that the state is fighting against my interests and the interests of other people who would benefit from this,” he said in an interview. Weber took out the loan so that he could complete a master’s degree in social work. The payments you’ve made haven’t put a dent in the principal you owe, which means your total debt is higher now than it was a decade ago.
«It’s incredibly important that we recognize the inherent unfairness of that system,» he said.
Most experts believe that if the Supreme Court determines that at least one of the challengers has standing (meaning that the challenger can show that they would be harmed by the proposed law), then the court’s 6-3 conservative majority would conclude that the program is illegal.
“Standing is crucial,” said Ilya Somin, a professor at George Mason University’s Antonin Scalia School of Law. Referring to the Biden administration’s legal arguments in defense of the proposal, he said it appears the administration «has put most of its eggs in the permanent basket» as it understands that persuading the court that the program is legal for any other reason would be a more difficult hurdle to overcome.
The court is hearing two cases, one brought by six states, including Missouri, and the other brought by two people, Myra Brown and Alexander Taylor, who have student loan debt.
The challengers argue that the administration’s plan, announced by Biden in August and originally scheduled to take effect last fall, violates the Constitution and federal law, in part because it circumvents Congress, which they said has the power to create laws related to student loan forgiveness.
The program, which would allow eligible borrowers to cancel up to $20,000 in debt, has been on hold since the US Court of Appeals for the 8th Circuit issued a temporary stay in October. Since then, the administration has closed the application process. Student loan debt holders currently do not have to make payments as part of the Covid relief measures that will remain in place until after the Supreme Court issues its ruling.
In any civil case, plaintiffs have to show that they have standing by persuading the judge not only that they have been harmed by the defendant’s actions, but also that a favorable court ruling would remedy that harm.
Of the various challengers, Missouri may have the best pitch to run. The state is hurt by the Biden plan because MOHELA would lose the income it earns from servicing the loans if the debts are forgiven, their lawyers argue. Missouri would also be directly hurt because MOHELA is required to make certain payments to the state treasury to help finance capital projects for state universities, the lawyers say. A spokeswoman for Bailey, the attorney general, did not respond to a request for comment.
In court documents, the state goes into great detail describing how MOHELA is not a separate entity from the state. Lawyers argue, for example, that the agency was created by the Legislature and the governor appoints board members from him.
«As such, MOHELA is part of Missouri, and the state has the ability to challenge actions that harm MOHELA’s finances,» the states argue in its brief.
Attorney General Elizabeth Prelogar, representing the Biden administration, said in court papers that MOHELA is a separate legal entity from the state of Missouri and therefore cannot be considered part of any analysis as to whether the state itself has standing.
“Missouri cannot now hold that the State and MOHELA are the same simply because it believes that MOHELA has the capacity to challenge a policy that the State opposes,” Prelogar wrote. He added that there is no evidence that MOHELA faces a significant drop in revenue or that the agency will be unable to meet its payment obligations to the state treasury.
another brief submitted by supporters of the program says that MOHELA has not made any payments to the state for a decade.
The «giant of financial services»
MOHELA has drawn scrutiny from Democratic lawmakers and groups supporting Biden’s plan for its role in the case. The agency has strayed well beyond its original mandate and is now a «financial services giant» handling one in $10 of outstanding student loan debt, according to the nonprofit Student Borrower Protection Center. who advocates for student loan relief.
Persis Yu, the center’s deputy executive director, said MOHELA would earn money during the loan repayment process if Biden’s plan went into effect.
«There are a lot of leaps and assumptions you have to make» to conclude that MOHELA is on its feet, he said.
MOHELA said in a letter last year that its executives were «not involved» with then-Attorney General Derek Schmidt’s decision to challenge Biden’s plan. Scott Giles, chief executive of MOHELA, did not respond to a request for comment.
In ruling in favor of the states, the appeals court accepted MOHELA’s standing argument and said there were reasons to conclude that it is an arm of the state. Even if it is not, the damage to the state caused by a decline in MOHELA payments to the treasury for capital projects is sufficient to establish standing, the court concluded. The appeals court did not decide whether the other states — Arkansas, Iowa, Kansas, Nebraska, and South Carolina — had standing.
Michael Dorf, a professor at Cornell Law School, said that while he expects the justices to debate the position on Tuesday, such questions rarely slow them down if the majority wants to decide the legal merits, especially in an «ideologically tense case» like the student loans.
Major Issues Doctrine
If the judges conclude that MOHELA has standing, then they could decide the case based on a legal argument put forward by the challengers that the Supreme Court has recently adopted called the «principal issues doctrine.» Under that theory, federal agencies cannot initiate radical new policies that have a significant economic impact without express authorization from Congress.
The Biden administration says its authority stems from a 2003 law called the Higher Education Opportunity Relief for Students Act, known as the HEROES Act. The law states that the government can provide relief to student loan recipients when there is a «national emergency.»
The leading questions doctrine fits perfectly with the skepticism of the conservative majority about sweeping claims of federal power. The court cited him last year in blocking Biden’s Covid vaccination or testing requirement for larger companies and curbing the Environmental Protection Agency’s authority to limit carbon emissions from power plants. Challengers say the HEROES Act’s language is not specific enough to authorize a proposal as broad as Biden’s plan.
It is because of the conservative bloc’s stance on these issues that most court observers believe the student loan program is likely to be struck down if the judges conclude that MOHELA, or any of the other contenders, is entitled to do it.
«It’s clearly the most likely outcome,» Somin said.