Biden v. Nebraska
Did the Secretary of Education have the authority under the HEROES Act of 2003 to cancel approximately $430 billion in federal student loan debt, and did the challenging states have legal standing to bring the case?
The Decision
6-3 decision · Opinion by John G. Roberts Jr. · 2023
Majority Opinion— John G. Roberts Jr.concurring ↓dissent ↓
The Supreme Court ruled 6–3 against the Biden administration, holding that the HEROES Act did not authorize the student loan forgiveness program. Chief Justice John Roberts wrote the majority opinion. The Court first addressed standing, finding that Missouri had standing to challenge the program because MOHELA, despite being structured as a separate public corporation, was sufficiently tied to the State of Missouri. The Court pointed to the fact that MOHELA was created by state law, its board was appointed by the governor, it was subject to state audits and oversight, and it directed funds to the state. Because MOHELA would lose substantial revenue from the forgiveness program, and because MOHELA was effectively part of Missouri, the state had a concrete financial injury that gave it the right to sue.
On the merits, the majority focused closely on the text of the HEROES Act. The law authorizes the Secretary to 'waive or modify' provisions of student financial assistance programs. Chief Justice Roberts explained that 'waive or modify' means to adjust or alter existing provisions — not to rewrite the law from the ground up. The debt cancellation program, the Court concluded, did not 'modify' existing student loan provisions in any ordinary sense of the word. Instead, it created an entirely new program of mass debt cancellation that Congress had never authorized. The majority drew an analogy: modifying a car by adding a spoiler is different from transforming it into a motorcycle. What the administration did was not a modification but a fundamental transformation of student loan policy.
The Court also invoked the 'major questions doctrine,' a principle holding that when an executive agency claims authority to make decisions of vast economic and political significance, it must point to clear congressional authorization. The majority noted that the program would cost an estimated $430 billion and affect the loans of virtually every federal student loan borrower. Such a sweeping action, the Court held, required more than a general reference to the power to 'waive or modify' provisions. Congress had considered and rejected targeted student loan forgiveness proposals on multiple occasions, which further undercut the idea that it had silently authorized a far broader program through a post-9/11 emergency statute.
The decision effectively struck down the loan forgiveness program in its entirety, preventing the cancellation of any debt under the plan. The ruling was seen as a significant check on executive power and a major application of the major questions doctrine.
Concurring Opinions
Justice Amy Coney Barrett wrote a concurrence specifically addressing the major questions doctrine, arguing that it is grounded in the constitutional separation of powers and the common-sense idea that Congress does not hide transformative policy decisions in vague or ancillary statutory provisions. She sought to clarify the doctrine's foundations in response to criticism that it was an invented judicial tool without textual basis.
Dissenting Opinions
Elena Kaganjoined by Sonia Sotomayor, Ketanji Brown Jackson
Justice Kagan argued that the HEROES Act's text plainly and broadly authorized the Secretary to respond to national emergencies by modifying student loan terms, including through debt cancellation. She accused the majority of deploying the major questions doctrine to override clear statutory text and to substitute its own policy preferences for those of Congress and the Executive Branch.
- The text of the HEROES Act is sweeping and unambiguous: it grants the Secretary power to 'waive or modify any statutory or regulatory provision' applicable to student loans during emergencies, and debt cancellation falls naturally within that broad grant of authority
- The major questions doctrine, as applied by the majority, functions as a judicial override of congressional intent — Congress chose expansive language deliberately, and the Court should not add limitations that Congress itself did not include
- The majority's standing analysis was flawed because MOHELA chose not to participate in the lawsuit, and Missouri was essentially asserting injuries belonging to an independent corporate entity that did not wish to challenge the program
- The Court was effectively making a policy decision — that student loan forgiveness was too significant to be allowed — while claiming to interpret a statute, undermining the separation of powers it purported to defend
Background & Facts
In August 2022, President Biden announced a sweeping student loan forgiveness program that would cancel up to $10,000 in federal student loan debt for individual borrowers earning under $125,000 per year, and up to $20,000 for borrowers who had received Pell Grants. The administration estimated the program would affect over 40 million borrowers and cost approximately $430 billion. The legal basis the administration cited was the Higher Education Relief Opportunities for Students Act of 2003 (the HEROES Act), a law originally passed in the wake of the September 11 attacks that gives the Secretary of Education power to 'waive or modify' student financial assistance program provisions during national emergencies. The administration invoked the ongoing COVID-19 national emergency as the triggering event.
Six states — Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina — filed suit challenging the program. They argued that the Secretary of Education had vastly overstepped his statutory authority and that mass debt cancellation was nothing like the targeted relief the HEROES Act was designed to permit. The states needed to demonstrate 'standing' — meaning they had to show they were concretely harmed by the program, not just that they disagreed with it as a policy matter.
The standing question centered primarily on Missouri. Missouri had created an entity called MOHELA (the Missouri Higher Education Loan Authority), a public corporation that services federal student loans. MOHELA stood to lose significant revenue — an estimated $44 million per year — if millions of loans it serviced were simply forgiven. The Biden administration argued that MOHELA was a legally separate entity from Missouri and that the state itself had no standing. Missouri countered that MOHELA was effectively part of the state: it was created by state law, its board was appointed by the governor, and its finances were intertwined with state functions, including transferring funds to the state treasury.
A federal district court initially dismissed the case for lack of standing, but the U.S. Court of Appeals for the Eighth Circuit reversed, finding that Missouri had standing through MOHELA and issuing a nationwide injunction blocking the program. Given the enormous financial stakes, the number of affected borrowers, and the fundamental questions about executive power, the Supreme Court agreed to hear the case on an expedited basis during its October 2022 term, ultimately hearing oral arguments in February 2023.
The Arguments
The Biden administration argued that the HEROES Act plainly granted the Secretary of Education broad authority to 'waive or modify' student loan provisions during a national emergency, and that the COVID-19 pandemic justified the relief program. They further argued that none of the six challenging states had standing because they could not show direct, concrete injury.
- The text of the HEROES Act authorizes the Secretary to 'waive or modify any statutory or regulatory provision' related to student financial assistance programs during national emergencies, which the administration read as encompassing debt cancellation
- MOHELA is a legally independent public corporation with its own governance structure and the ability to sue and be sued — it is not the same entity as the State of Missouri, so Missouri cannot claim MOHELA's financial losses as its own injury for standing purposes
- The program was a direct and necessary response to the economic harm caused by the COVID-19 pandemic, fitting squarely within the purpose of the HEROES Act, which was designed to ensure borrowers are not worse off financially due to national emergencies
The six states argued that the HEROES Act never gave the Secretary of Education anything close to the power to cancel hundreds of billions of dollars in student loan debt, and that such a massive and transformative action required clear and explicit authorization from Congress. Missouri in particular argued that it had standing because MOHELA was functionally part of the state.
- The power to 'waive or modify' existing loan provisions is fundamentally different from the power to cancel debt entirely — the HEROES Act was designed for targeted, temporary adjustments, not wholesale elimination of loan obligations
- A program of this magnitude — roughly $430 billion affecting tens of millions of borrowers — represents a major question of economic and political significance that requires clear congressional authorization under the 'major questions doctrine'
- Missouri has standing because MOHELA was created by Missouri law, its board members are appointed by the governor, it is subject to state oversight, and it transfers money to the state — making its financial losses effectively Missouri's losses