Personal finance

Biden administration lawyer may have saved student loan forgiveness plan at Supreme Court, experts say

U.S. Solicitor General Elizabeth Prelogar
Artist: Bill Hennessey

The government’s top Supreme Court lawyer may have saved President Joe Biden‘s $400 billion student loan forgiveness plan from what experts considered all but certain defeat.

Experts lobbed praise on Solicitor General Elizabeth Prelogar, the lawyer who represented the Biden administration in front of the nine justices Tuesday.

“The Biden administration now seems more likely than not to win the cases,” said higher education expert Mark Kantrowitz.

“Her preparation, poise and power were impressive,” Kantrowitz said.

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In contrast, the attorneys for plaintiffs opposed to the program were less than stellar, Kantrowitz said. “It was like the difference between a star quarterback and two tiddlywinks players,” he said.

University of Illinois Chicago law professor Steven Schwinn agreed: “Prelogar knocked it out of the park.”

“I do think she could have influenced or even changed the thinking of two justices, maybe more,” he added.

On Wednesday, Fordham law professor Jed Shugerman tweeted that he remains “struck by SG Elizabeth Prelogar’s brilliant performance.”

“She may have snatched victory from the jaws of defeat,” Shugerman wrote.

The nine justices considered two legal challenges to Biden’s plan to cancel up to $20,000 in student debt for borrowers. Six GOP-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — had brought one of the lawsuits, and the other was backed by the Job Creators Network Foundation, a conservative advocacy organization.

Prelogar argued that the president was acting squarely within the law to avoid borrower distress during national emergencies and that plaintiffs had not shown in any way that they’d be harmed by the policy, which is typically a requirement to establish so-called legal standing.

When the Biden administration rolled out its student loan forgiveness plan in August, it cited the Heroes Act of 2003 as its legal justification.

The Biden administration now seems more likely than not to win the cases.
Mark Kantrowitz
higher education expert

That law, which is a product of the Sept. 11 terrorist attacks, allows the U.S. secretary of education to “waive or modify” student loan programs to ensure borrowers aren’t left worse off because of a national emergency. Opponents of the president’s plan say canceling hundreds of billions in dollars in student debt for tens of millions of Americans goes far beyond the scope of the Heroes Act.

Justice Clarence Thomas, who kicked off the justices’ questioning of the Biden administration, seemed to echo that view.

“We’re talking about half a trillion dollars and 43 million Americans,” Thomas said. “How does that fit under the normal understanding of ‘modifying'”?

Prelogar countered that the heart of the provision’s purpose was to allow the secretary to make sure borrowers don’t suffer financially because of their loans during a crisis and that’s exactly what the Biden administration’s policy does.

Supreme Court justices listen to arguments.
Artist: Bill Hennessey

A top U.S. Department of Education official recently warned that the public health crisis has caused considerable financial harm to student loan borrowers and that its debt cancellation plan is necessary to stave off a historic rise in delinquencies and defaults.

“It couldn’t have surprised Congress one bit that in response to hardship posed by a national emergency, the secretary might consider similarly providing discharge if that’s what it takes to make sure borrowers don’t default,” Prelogar said.

Justice Elena Kagan agreed.

“This is an emergency provision,” Kagan said at one point, posing a hypothetical that the crisis had been an earthquake rather than a pandemic.

“You don’t think Congress wanted to give … the secretary power to say, ‘Oh, my gosh, people have had their homes wiped out, we’re going to discharge their student loans”?

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