My prior posts on President Biden’s((Technically, the statute cited as authority for student loan forgiveness delegates authority to the secretary of education, but there is no doubt that the President is calling the shots here.)) student loan forgiveness plan discussed some concerns about the program and the arguments made for and against loan forgiveness and the standing ruling in a Texas federal judge’s decision invalidating it.
I don’t believe that I previously commented on the timing of the program’s announcement. While running for office President Biden campaigned for $10,000 in debt relief (the base amount included in the program). He took office on January 20, 2021, and it took his administration just over nineteen months to consider whether to implement that program. I do not believe that there was any “consideration” except exactly how to do it, that there would be some measure of executive-authorized loan forgiveness (unless congressional action made it unnecessary) was a given. For the answer to why it took so long one need only look at a calendar: the program was announced some two and one-half months before the mid-term elections,((Absent the challenges, actual loan forgiveness may well have started just before the election.)) timing no doubt intended to help Democratic candidates.
As I write this post the judicial challengers have two significant victories. The first is the Texas case, which I expect to be reversed for the reasons expressed in my earlier post, and the second is the Eighth Circuit’s grant of a temporary injunction pending appeal in Nebraska v. Biden, which I will discuss here.
In late September six states – Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina – commenced an action in the United States District Court for the Eastern District of Missouri for declaratory and injunctive relief asserting the student debt relief plan violated the separation of powers and the Administrative Procedure Act because it exceeds the authority delegated by Congress. About three weeks later Judge Henry Edward Autrey denied an application for a preliminary injunction against the plan and dismissed the case because he concluded that none of the plaintiffs had standing((As I explained in my last post, “Under the U.S. constitution, federal judicial power is limited to ‘Cases’ and ‘Controversies.’ Federal courts will not give advisory opinions. They have, therefore, developed the requirement that the plaintiff have ‘standing’ in order to bring a case.”)) to bring it.
The plaintiffs have appealed Judge Autrey’s decision to the U.S. Court of Appeals for the Eighth Circuit, which gave them a victory (which may just be temporary) by granting the requested temporary injunction while it considers the appeal.
As widely reported, the Biden Administration has applied to the Supreme Court to vacate the injunction. In accordance with the generally accepted standard for injunctive relief, the brief in support of that application argues both that the Administration is likely to succeed on the merits and that the equities((The argument is not that forgiveness of student loans is the more equitable result, but to weigh the relative harms that the parties will suffer as a result of the temporary injunction; it is often said that a temporary injunction will not issue without “irreparable harm.”)) favor vacating the injunction. The ‘success on the merits’ argument is a detailed defense of the legality of the loan forgiveness programs, but I want to comment on the argument respecting the equities.
In line with its standing argument, the government’s brief asserts that plaintiffs have not suffered any injury, let alone an “irreparable” injury. The Eighth Circuit’s analysis of this issue was also brief; it found that “the equities strongly favor an injunction considering the irreversible impact the Secretary’s debt forgiveness action would have as compared to the lack of harm an injunction would presently impose.”
This is a key observation. Once the Administration actually starts to forgive the debt, it is becomes extremely unlikely, even if there is a ruling that the forgiveness program was unauthorized (a ruling we’re not likely to see because it will be a moot question), that the forgiveness can or will be reversed. No doubt this is a result that the proponents of student loan forgiveness would welcome.
Jay Bohn
November 21, 2022