My CNN Article on “Why the Supreme Court Got it Right on Student Loans”

CNN just published my article on today’s Supreme Court student loan forgiveness decision. Here is an excerpt:


In a lawsuit brought by six state governments, the Supreme Court on Friday ruled that President Joe Biden’s massive $430 billion student loan forgiveness plan is illegal because it was never authorized by Congress, and the Constitution gives Congress – not the president – the power to determine how federal funds are spent. The court made the right decision: If the administration had won, Biden and future presidents would have been empowered to use vague statutes to usurp Congress’ constitutional control over the federal budget. Moreover…. it also would have allowed the president to abuse emergency powers for partisan ends….

The Supreme Court…. rightly ruled that the HEROES Act’s language comes nowhere near authorizing such a massive loan forgiveness plan. As Chief Justice John Roberts explained in the majority opinion, “The authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them.” The word “waive” also doesn’t give the government the power to forgive loans on a massive scale, because, as Roberts noted, the government conceded that the term “waiver” as used in the HEROES Act cannot refer to waiving loan repayments.

In addition, for the  majority of the more than 40 million borrowers the White House claims would be eligible for forgiveness, the government presented no proof that, as a result of Covid, they were placed “in a worse position financially.” Over 80% of employed college graduates did not even report a decrease in salary during the pandemic, and few suffered prolonged unemployment, according to data from the US Bureau of Labor Statistics. The lack of evidence that most beneficiaries’ ability to pay was impaired by the pandemic seems to me a stronger basis for the court’s ruling than Roberts’ analysis of the terms “waive” and “modify…”

Presidents of both parties can be tempted to use emergency powers as a pretext to enact policies they otherwise can’t pass. In 2019, Trump used a dubious emergency declaration to try to divert Pentagon funds to build a wall along the southern border. Trump’s emergency declaration was bogus, and the statutes he cited didn’t give him the power to transfer military funds….

Biden’s abuse of emergency powers, like Trump’s before it, would likely have caused more harm than good. His student loan forgiveness plan would have been a waste of taxpayer funds when the US is already facing a looming fiscal crisis, a regressive policy in that it helps the relatively affluent (former college students) and potentially inflationary

Those who differ on policy should still be able to agree that it is dangerous to give one politician the power to circumvent the Constitution and divert federal funds to political projects not authorized by Congress. Even if you trust Biden to wield such power wisely, you likely do not have similar faith in the next Republican president – and vice versa.

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