In Biden v. Nebraska, decided June 30, 2023, the Supreme Court ruled 6-3 that the Secretary of Education did not have legal authority to cancel hundreds of billions of dollars in federal student loan debt under the HEROES Act of 2003. Chief Justice John Roberts wrote the majority opinion, which held that a program of that scale required clear authorization from Congress that the statute did not provide.1Supreme Court of the United States. Supreme Court Docket – No. 22-506 – Section: Jun 30 20232Justia. Biden v. Nebraska, 600 U.S. (2023)
The Debt Cancellation Program at Issue
The plan would have canceled up to $10,000 in federal student loan debt for borrowers earning less than $125,000 in either the 2020 or 2021 tax year. Borrowers who had received Pell Grants qualified for up to $20,000 in forgiveness. The administration justified the program as a response to the economic effects of the COVID-19 pandemic.2Justia. Biden v. Nebraska, 600 U.S. (2023)
Why Missouri Could Sue
Six states challenged the program, but the Court’s standing analysis turned on Missouri. The state had created the Missouri Higher Education Loan Authority (MOHELA) to service student loans, and the Court found MOHELA to be an instrumentality of Missouri performing a public function. Because the cancellation plan would cost MOHELA an estimated $44 million in annual fees, the justices treated that loss as a direct financial injury to the state, which was enough to give Missouri standing to sue in federal court.2Justia. Biden v. Nebraska, 600 U.S. (2023)
Why the HEROES Act Did Not Authorize the Program
The government relied on 20 U.S.C. § 1098bb, a provision of the HEROES Act that lets the Secretary of Education “waive or modify” rules governing federal student aid during a national emergency so that affected borrowers are not left worse off. The administration read that language as broad enough to authorize mass cancellation in response to the pandemic.3Office of the Law Revision Counsel. 20 U.S.C. § 1098bb
The Court disagreed on the text. It read “modify” as permitting moderate adjustments rather than fundamental transformation, and concluded that discharging hundreds of billions of dollars in loan balances was not a waiver or modification of existing rules but a rewrite of the loan system itself.2Justia. Biden v. Nebraska, 600 U.S. (2023)
The majority also applied the Major Questions Doctrine, which requires clear congressional authorization when an agency asserts new power over a matter of vast economic and political significance. Given the size and novelty of the cancellation program, the Court held that the general language of the HEROES Act did not supply the specific permission the doctrine demands. Creating a debt forgiveness program on that scale, the majority reasoned, is a legislative choice that belongs to Congress.2Justia. Biden v. Nebraska, 600 U.S. (2023)
The Dissent
The three dissenting justices took the view that the HEROES Act’s “waive or modify” language was flexible enough to cover debt relief tied to the national emergency the pandemic created. That reading did not carry the Court, and the majority opinion is the controlling law.2Justia. Biden v. Nebraska, 600 U.S. (2023)
What the Ruling Means
The decision blocked the cancellation plan from taking effect and left existing federal student loan balances in place. Beyond the loans themselves, the opinion sets a marker for how far executive agencies can stretch older statutes: when the economic and political stakes are large enough, general grants of authority will not substitute for specific direction from Congress.2Justia. Biden v. Nebraska, 600 U.S. (2023)