Respondents Brief — Department of Education, et al., Petitioners v. Myra Brown, et al.
Supreme Court briefJan 27, 2023
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No. 22-535
In the Supreme Court of the United States
UNITED STATES DEPARTMENT OF EDUCATION, ET AL.,
Petitioners,
v.
MYRA BROWN, ET AL.,
Respondents.
ON WRIT OF CERTIORARI BEFORE JUDGMENT
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
BRIEF FOR RESPONDENTS
J. Michael Connolly
Counsel of Record
Cameron T. Norris
Gilbert C. Dickey*
James F. Hasson
Steven C. Begakis
CONSOVOY MCCARTHY PLLC
1600 Wilson Blvd., Ste. 700
Arlington, VA 22209
(703) 243-9423
mike@consovoymccarthy.com
*Admitted in AL, DC, NC, and WV.
VA bar application pending.
January 27, 2023
Counsel for Respondents
i
QUESTIONS PRESENTED
1. Whether Respondents have Article III standing.
2. Whether Petitioners’ Debt Forgiveness Program is statutorily authorized and was adopted in a
procedurally proper manner.
ii
TABLE OF CONTENTS
Questions Presented ................................................... i
Table of Cited Authorities......................................... iii
Introduction .................................................................1
Statement of the Case .................................................3
A. The Higher Education Act .............................3
B. The HEROES Act ...........................................6
C. The Debate over Canceling Student
Loans ...............................................................9
D. The Debt Forgiveness Program ................... 11
E. Proceedings Below ........................................ 14
Summary of Argument.............................................. 18
Argument ................................................................... 22
I.
Respondents have standing. ........................ 22
II. The Secretary adopted the Program
without following the proper procedures. .... 34
A. The Secretary cannot avoid his
rulemaking obligations unless the
Program is authorized by the
HEROES Act. ......................................... 34
B. The HEROES Act does not authorize
the Program............................................ 41
Conclusion ................................................................. 55
iii
TABLE OF CITED AUTHORITIES
Cases
Action on Smoking & Health v. CAB,
713 F.2d 795 (D.C. Cir. 1983) ............................... 40
Ala. Ass’n of Realtors v. HHS,
141 S.Ct. 2485 (2021) ... 2, 17, 39, 41-42, 45-46, 48, 55
Am. Elec. Power v. Connecticut,
564 U.S. 410 (2011) ............................................... 55
Ashbacker Radio Corp. v. FCC,
326 U.S. 327 (1945) ............................................... 27
Azar v. Allina Health Servs.,
139 S.Ct. 1804 (2019) .................................. 6, 20, 39
BedRoc Ltd., LLC v. United States,
541 U.S. 176 (2004) ............................................... 38
CBS v. United States,
316 U.S. 407 (1942) ............................................... 39
Camreta v. Greene,
563 U.S. 692 (2011) ............................................... 33
Casillas v. Madison Ave. Ass’n,
926 F.3d 329 (7th Cir. 2019) ................................. 28
Chrysler Corp. v. Brown,
441 U.S. 281 (1979) ..................................... 1, 27, 35
Citizens United v. FEC,
558 U.S. 310 (2010) ............................................... 33
Collins v. Yellen,
141 S.Ct. 1761 (2021) ................................ 22, 26, 30
Czyzewski v. Jevic Holding Corp.,
580 U.S. 451 (2017) ......................................... 27, 28
iv
Defs. of Wildlife v. Gutierrez,
532 F.3d 913 (D.C. Cir. 2008) ............................... 32
Dickinson v. Zurko,
527 U.S. 150 (1999) ......................................... 37, 40
FEC v. Cruz,
142 S.Ct. 1638 (2022) ............................................ 26
Gonzales v. Oregon,
546 U.S. 243 (2006) ......................................... 42, 44
Little Sisters of the Poor Saints Peter & Paul
Home v. Pennsylvania, 140 S.Ct. 2367 (2020) ..... 33
Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992) .............. 2, 18, 22, 23, 25-28, 30
Marcello v. Bonds,
349 U.S. 302 (1955) ............................................... 37
Massachusetts v. EPA,
549 U.S. 497 (2007) ...................18-20, 22-25, 28, 29
MCI Tel. Corp. v. AT&T,
512 U.S. 218 (1994) ....................... 21, 38, 49, 50, 51
Morgan Stanley Capital Grp. Inc. v. Pub. Utility
Dist. No. 1 of Snohomish Cnty.,
554 U.S. 527 (2008) ............................................... 33
NFIB v. OSHA,
142 S.Ct. 661 (2022) ............................. 42, 44-47, 52
Nat’l Tour Brokers Ass’n v. United States,
591 F.2d 896 (D.C. Cir. 1978) ............................... 32
Ne. Fla. Chapter, Assoc. Gen. Contractors of Am. v.
Jacksonville, 508 U.S. 656 (1993)......................... 28
v
Perez v. Mortgage Bankers Ass’n,
575 U.S. 92 (2015) ................................................. 35
Seila Law LLC v. CFPB,
140 S.Ct. 2183 (2020) ...................................... 28, 32
Shalala v. Guernsey Mem’l Hosp.,
514 U.S. 87 (1995) ................................................. 35
Sorenson Comm. v. FCC,
755 F.3d 702 (D.C. Cir. 2014) ............................... 40
Sosa v. Alvarez-Machain,
542 U.S. 692 (2004) ............................................... 50
Spokeo, Inc. v. Robins,
578 U.S. 330 (2016) ............................................... 25
Summers v. Earth Island Inst.,
555 U.S. 488 (2009) .............................. 19, 24-26, 29
Texas v. United States,
40 F.4th 205 (5th Cir. 2022) ................................. 29
U.S. Steel Corp. v. EPA,
595 F.2d 207 (5th Cir. 1979) ................................. 27
West Virginia v. EPA,
142 S.Ct. 2587 (2022) ... 17, 21, 41-42, 44-45, 47-48,
Whitman v. Am. Trucking Ass’ns., Inc.,
531 U.S. 457 (2001) ............................................... 51
Constitutional Provisions
U.S. Const. Art. I, §9, cl. 7 ........................................ 47
U.S. Const. Art. III ........................................ 20, 22, 29
Statutes
5 U.S.C. §551(4) ......................................................... 35
vi
5 U.S.C. §553(b) ..................................................... 6, 26
5 U.S.C. §553(c) ..................................................... 6, 26
5 U.S.C. §559 ......................................................... 6, 37
5 U.S.C. §702 ............................................................. 26
5 U.S.C. §706(2)(C) .................................................... 32
5 U.S.C. §706(2)(D).................................................... 26
20 U.S.C. §1078-11(a)(1) ........................................... 44
20 U.S.C. §1078-12 .................................................... 44
20 U.S.C. §1082(a) ............................................... 11, 19
20 U.S.C. §1082(a)(6) ............................................ 4, 30
20 U.S.C. §1087 ............................................. 13, 48, 49
20 U.S.C. §1087(a) ....................................................... 4
20 U.S.C. §1087(a)(1) ................................................ 49
20 U.S.C. §1087(b) ....................................................... 4
20 U.S.C. §1087e(a)(1) ............................................. 4, 30
20 U.S.C. §1087e(f) ...................................................... 4
20 U.S.C. §1087e(m)(1) ............................................. 44
20 U.S.C. §1087j(a) .................................................... 44
20 U.S.C. §1087j(b) .................................................... 44
20 U.S.C. §1087dd(g) ........................................... 13, 48
20 U.S.C. §1087ee(a)(2) ......................................... 4, 44
20 U.S.C. §1087hh(2) ............................................ 4, 30
20 U.S.C. §1098a ....................................................... 36
20 U.S.C. §1098a(a)(1) .................................... 5, 26, 27
vii
20 U.S.C. §1098a(b)(2) ................................ 5, 6, 35, 37
20 U.S.C. §1098bb(a) ................................................. 38
20 U.S.C. §1098bb(a)(1) .................... 38, 39, 48, 51, 55
20 U.S.C. §1098bb(a)(2) ............................ 7, 38, 46, 55
20 U.S.C. §1098bb(a)(2)(A)...................... 21, 51, 52, 54
20 U.S.C. §1098bb(b)(1) .............. 20, 34, 35, 36, 38, 39
20 U.S.C. §1098bb(b)(3) ............................................ 55
20 U.S.C. §1098bb(d) ............................... 20, 34, 36, 37
20 U.S.C. §1098ee(2)(A) ............................................ 54
20 U.S.C. §1098ee(2)(B) ............................................ 54
20 U.S.C. §1098ee(2)(C) ............................................ 54
20 U.S.C. §1098ee(2)(D) ............................................ 54
20 U.S.C. §1098ee(4) ................................................. 46
Pub. L. 107-122, 115 Stat. 2386 (Jan. 15, 2002) .... 6, 7
Pub. L. 108-76, 117 Stat. 904 (Aug. 18, 2003) ............ 7
Pub. L. 109-78, 119 Stat. 2043 (Sept. 30, 2005) ......... 8
Pub. L. 110-93, 121 Stat. 999 (Sept. 30, 2007) ........... 8
Pub. L. 116-136, 134 Stat. 281 (Mar. 27, 2020) . 42, 46
Pub. L. 117-2, 135 Stat. 4 (Mar. 11, 2021) ............... 44
Regulations
34 C.F.R. §30.70(a)(1)................................................ 35
34 C.F.R. §30.70(e)(1) ................................................ 35
34 C.F.R. Part 674, Subpart D ...................... 13, 48, 50
34 C.F.R. §§674.51-64 ............................................... 50
viii
34 C.F.R. §674.53 ........................................................ 4
34 C.F.R. §674.57 ........................................................ 4
34 C.F.R. §682.402 ........................................ 13, 48, 50
34 C.F.R. §682.402(a) ................................................ 35
34 C.F.R. §685.204 ...................................................... 4
34 C.F.R. §685.205 ...................................................... 4
34 C.F.R. §685.212 .......................................... 4, 13, 48
64 Fed. Reg. 58938 (Nov. 1, 1999) ............................ 35
67 Fed. Reg. 67048 (Nov. 1, 2002) ............................ 35
68 Fed. Reg. 69312 (Dec. 12, 2003) ............................. 8
70 Fed. Reg. 61037 (Oct. 20, 2005) ............................. 8
72 Fed. Reg. 72947 (Dec. 26, 2007) ............................. 9
77 Fed. Reg. 59311 (Sept. 27, 2012) ........................... 9
81 Fed. Reg. 75926 (Nov. 1, 2016) ............................ 35
82 Fed. Reg. 45465 (Sept. 29, 2017) ........................... 9
87 Fed. Reg. 61512 (Oct. 12, 2022) ............... 13, 48, 50
87 Fed. Reg. 65904 (Nov. 1, 2022) .............................. 5
88 Fed. Reg. 1894 (Jan. 11, 2023) ............................. 27
Legislative Materials
147 Cong. Rec. H10891 (Dec. 19, 2001) ...................... 7
147 Cong. Rec. H10938 (Dec. 20, 2001) ...................... 7
147 Cong. Rec. S13311 (Dec. 14, 2001)....................... 7
149 Cong. Rec. E663 (Apr. 3, 2003) ............................ 8
149 Cong. Rec. H2521 (Apr. 1, 2003) .................... 7, 43
ix
149 Cong. Rec. H2522 (Apr. 1, 2003) ........................ 43
149 Cong. Rec. H2524 (Apr. 1, 2003) ........................ 43
149 Cong. Rec. H2525 (Apr. 1, 2003) ........................ 43
149 Cong. Rec. H2553 (Apr. 1, 2003) .......................... 8
149 Cong. Rec. S10866 (July 31, 2003)....................... 8
151 Cong. Rec. H8111 (Sept. 20, 2005)....................... 8
151 Cong. Rec. S10520 (Sept. 27, 2005) ..................... 8
153 Cong. Rec. H10789 (Sept 25, 2007).................. 8, 9
153 Cong. Rec. S12316 (Sept. 27, 2007) ..................... 9
H.R. 2034, 117th Cong. (2021) .................................. 44
H.R. 3887, 116th Cong. (2019) .................................. 10
H.R. Rep. 105-481 (Apr. 17, 1998) ................ 1, 5, 6, 45
Hearing Before the H. Comm. on Fin. Servs.,
116th Cong. 56 (Sept. 10, 2019)............................ 10
H. Res. 100, 117th Cong. (Feb. 4, 2021) ............. 11, 30
S. 2235, 116th Cong. (2019) ................................ 10, 44
S. Rep. 102-204 (Nov. 12, 1991) .................................. 5
S. Res. 46, 117th Cong. (Feb. 8, 2021) ................ 11, 30
Other Authorities
Agency Profiles, USAs-pending.gov, perma.cc/H7AAB3EZ ...................................................................... 14
Akana, Expectations of Student Loan Repayment,
Forbearance, and Cancellation: Insights from
Recent Survey Data (May 2022),
perma.cc/245V-UGS7 ............................................ 53
x
Berman, Where the 2020 Candidates Stand on Student Debt & College Affordability, MarketWatch
(July 30, 2019), perma.cc/TY4P-D99L.................... 9
Clean Power Plan By The Numbers, EPA (Aug. 3,
2015), perma.cc/5PJG-PNSR ................................ 14
Consular Affairs by the Numbers, U.S. Dep’t of State
(Jan. 2020), perma.cc/L8PN-BCX4....................... 54
Costs of Suspending Student Loan Payments and
Canceling Debt, Cong. Budget Off. (Sept. 26,
2022), perma.cc/2N85-PRGL ................................ 14
Egan, Biden to Review Executive Authority to Cancel
Student Debt, NBC News (Apr. 1, 2021),
perma.cc/849S-FC5A............................................. 11
Fact Sheet, The White House (Aug. 24, 2022),
perma.cc/4AWB-5E6W .................................... 12, 52
Federal Student Loan Forgiveness and Loan
Repayment Programs, Cong. Rsch. Serv. (2018),
bit.ly/3XEzhdt ......................................................... 4
Herrine, The Law and Political Economy of a Student Debt Jubilee, 68 Buff. L. Rev. 281 (2020)..... 30
Hunt, Jubilee Under Textualism, 48 J. Legis. 31
(2021) ..................................................................... 30
Kantrowitz, Year in Review: Student Loan Forgiveness Legislation, Forbes (Dec. 24, 2020),
perma.cc/RKW4-TEJW ........................................... 9
Mangrum, Three Key Facts from the Center for
Microeconomic Data’s 2022 Student Loan Update,
Fed. Rsrv. Bank of N.Y. (Aug. 9, 2022),
perma.cc/9EV3-PS4X ............................................ 53
xi
Minsky, Biden Affirms: “I Will Eliminate Your Student Debt,” Forbes (Oct. 7, 2020), perma.cc/8NXW79X4 ....................................................................... 10
Nova, Where the 2020 Democratic Candidates Stand
on Student Debt, CNBC (Sept. 21, 2019),
perma.cc/AF47-JRNY ........................................... 10
Pager, Latest White House Plan Would Forgive
$10,000 in Student Debt Per Borrower, Wash. Post
(May 27, 2022), perma.cc/QUN2-X9QX ............... 11
Parlapiano, Where $5 Trillion in Pandemic Stimulus
Money Went, N.Y. Times (Mar. 11, 2022),
perma.cc/FXP6-V3BS ............................................ 54
Press Release, Sen. Warren (July 23, 2019),
perma.cc/L9D4-ASRY ............................................. 9
Recalibrating Regulation of Colleges & Universities,
Report of the Task Force on Federal Regulation
of Higher Education (2015), perma.cc/KVV6DMVP .............................................................. 4, 5, 6
Scalia & Garner, Reading Law (2012) ..................... 50
Sen. Biden, Joe Biden Outlines New Steps to Ease
Economic Burden on Working People, Medium
(Apr. 9, 2020), perma.cc/X3ZN-X27T ................... 10
Shear, Biden Gave in to Pressure on Student Debt
Relief After Months of Doubt, N.Y. Times
(Aug. 26, 2022), perma.cc/T75A-3J9..................... 42
Shugerman, Biden’s Student-Debt Rescue Plan Is a
Legal Mess, The Atlantic (Sept. 4, 2022),
perma.cc/SA7E-MJYB........................................... 12
xii
Statement by President Biden on the July Jobs
Report, White House (Aug. 5, 2022),
perma.cc/9MH7-QTPM ......................................... 53
The Biden-Harris Economic Blueprint, White
House (Sept. 2022), perma.cc/3W44-XFRG.......... 54
INTRODUCTION
Most agree that America’s nearly $2 trillion of
student-loan debt is a problem, but few agree how to
solve it. Federal loan forgiveness raises a host of difficult questions—who gets left out, how much is forgiven, what effect it will have on the economy, and
much more. Congress long ago decided that questions
like these cannot be answered by the agency alone;
they require maximally participatory procedures. Under the Higher Education Act and the Administrative
Procedure Act, all regulations affecting student loans
must go through both negotiated rulemaking and notice-and-comment. Together, these mandatory procedures give borrowers and other affected parties
“meaningful input into the regulatory process,” H.R.
Rep. 105-481, at 145 (Apr. 17, 1998), and promote
“fairness and informed administrative decisionmaking,” Chrysler Corp. v. Brown, 441 U.S. 281, 316
(1979).
Yet the Secretary’s Debt Forgiveness Program
gives relief to 40 million borrowers without following
these rulemaking procedures. Instead, the Secretary
decided the key details of the Program behind closed
doors, including which individuals will receive debt
forgiveness, how much of their debt will be forgiven,
and which types of debt will qualify. The result was
predictable: some will benefit handsomely, some will
be shortchanged, and others will be left out entirely.
Respondents are two individuals with federal student-loan debts. If the Secretary is going to provide
debt forgiveness, Respondents believe their debts
should be forgiven too. But Respondent Brown does
2
not qualify for debt forgiveness because the Program
does not cover commercially held federal student
loans that are not in default, and Respondent Taylor
does not qualify for the full amount of debt forgiveness
because he did not receive a Pell Grant in college. Respondents believe it is irrational, arbitrary, and unfair
to exclude Brown from the Program just because her
debt is commercially held and current, and to calculate the amount of debt forgiveness that Taylor receives based on the financial circumstances of his parents. Respondents want the opportunity to obtain tens
of thousands of dollars in debt forgiveness. By adopting the Program without negotiated rulemaking and
notice-and-comment, the Government deprived them
of their “procedural right[s] to protect [their] concrete
interests.” Lujan v. Defenders of Wildlife, 504 U.S.
555, 572 n.7 (1992).
The Government’s only excuse for ignoring its
rulemaking obligations is the HEROES Act—an uncontroversial bill designed to defer loan payments for
soldiers fighting abroad. As the district court correctly
held, the Act does not authorize the Secretary to cancel nearly half-a-trillion dollars in debts held by tens
of millions of individuals. Indeed, it “strains credulity
to believe that this statute grants the [Secretary] the
sweeping authority that [he] asserts.” Ala. Ass’n of
Realtors v. HHS, 141 S.Ct. 2485, 2486 (2021).
While the district court correctly held that the
HEROES Act does not authorize the Program, it incorrectly held that the Program was adopted in a procedurally proper manner. Because the HEROES Act
does not authorize the Program, no statute excuses
3
the Secretary from his rulemaking obligations under
the HEA and APA. The baseline procedures thus apply, and the Program was adopted in a procedurally
improper manner. This Court should affirm the judgment below on that alternative ground.
STATEMENT OF THE CASE
Title IV of the Higher Education Act authorizes
the Secretary of Education to issue student loans. Although loans generally must be repaid with interest,
the Department has adopted regulations that permit
debt forgiveness in various circumstances. Under the
HEA and APA, all regulations concerning student
loans must be adopted through a two-step process:
first negotiated rulemaking, then notice-and-comment. Instead of following these procedures, the Secretary promulgated a half-trillion-dollar debt-forgiveness program by invoking the HEROES Act. Respondents sued the Government for failing to follow
the proper procedures. After finding that Respondents
had standing, the district court rejected their procedural arguments, but nevertheless vacated the Program because the HEROES Act does not authorize it.
A. The Higher Education Act
Federal loans are “[b]orrowed money for college or
career school … [that] must be repaid with interest.”
Types of Aid, U.S. Dep’t of Educ., perma.cc/7BCCFL7B. Title IV of the HEA recognizes three studentloan programs: Federal Family Education loans, Direct loans, and Perkins loans. Br.3. About 43.5 million
individuals currently have federal student loans, owing a collective $1.63 trillion. Br.3.
4
Though loans generally must be repaid, the HEA
empowers the Secretary to implement dozens of loanforgiveness and loan-repayment programs. See Federal Student Loan Forgiveness and Loan Repayment
Programs 3, Cong. Rsch. Serv. (2018), bit.ly/3XEzhdt.
The Secretary has adopted regulations to implement
these programs. For example, borrowers employed in
public service, such as teachers and public defenders,
can have their loans forgiven. E.g., 20 U.S.C.
§1087ee(a)(2); 34 C.F.R. §§674.53, 674.57. Borrowers
also can have their loans discharged when they experience certain unfortunate circumstances, such as permanent disability or bankruptcy. E.g., 20 U.S.C.
§1087(a)-(b); 34 C.F.R. §685.212. And borrowers can
pause their monthly payments during times of financial or personal difficulty. E.g., 20 U.S.C. §1087e(f); 34
C.F.R. §§685.204, 685.205. Beyond these programs,
the HEA gives the Secretary general authority to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired.”
20 U.S.C. §1082(a)(6); see also id. §§1087hh(2),
1087e(a)(1).
Under the HEA and APA, the Secretary must follow a two-step process for all regulations pertaining to
student loans: (1) develop the proposed regulation
through negotiated rulemaking, and (2) provide notice
and an opportunity to comment.
Negotiated Rulemaking. The Department is
“the only federal agency that must routinely use [a]
process” known as “negotiated rulemaking.” Recalibrating Regulation of Colleges & Universities 32, Report of the Task Force on Federal Regulation of
5
Higher Education (2015), perma.cc/KVV6-DMVP. Negotiated rulemaking brings an agency together with
the various constituencies “affected by its regulations”
to “discus[s]—and ideally reac[h] agreement on—the
text of a proposed rule before it is issued.” Id. “Unlike
simple notice-and-comment rulemaking, the negotiated rulemaking process affords ample opportunities
for the public to not only comment but also to understand the Department’s proposed rules and policies.”
87 Fed. Reg. 65904, 65907 (Nov. 1, 2022); see S. Rep.
102-204, at 58 (Nov. 12, 1991) (negotiated rulemaking
“leads to fairer and more appropriate rules”).
Negotiated rulemaking is “a mandatory step in
the process” for “regulations related to student financial aid programs.” Recalibrating Regulation 33. Specifically, the Secretary must use negotiated rulemaking for “[a]ll regulations pertaining” to Title IV of the
HEA. 20 U.S.C. §1098a(b)(2). (Title IV, as a reminder,
governs FFEL loans, Direct loans, and Perkins loans.)
Under the negotiated-rulemaking process, the Secretary “shall obtain public involvement in the development of proposed regulations for” Title IV. §1098a
(a)(1). In particular, the Secretary “shall obtain the
advice of and recommendations from” the key stakeholders, including “students, legal assistance organizations that represent students, institutions of higher
education, State student grant agencies, guaranty
agencies, lenders, secondary markets, loan servicers,
guaranty agency servicers, and collection agencies.”
Id. This collaboration ensures that “program participants [have] meaningful input” into all regulations affecting student loans. H.R. Rep. 105-481, at 145 (Apr.
17, 1998). The Secretary’s proposed regulations “shall
6
conform to agreements resulting from such negotiated
rulemaking” unless the Secretary “reopens” the process or “provides a written explanation to the participants” explaining the deviation. 20 U.S.C. §1098a
(b)(2).
Notice and Comment. Negotiated rulemaking is
“a supplement to the rulemaking provisions of the
APA.” Recalibrating Regulation 92. It “does not reduce in any way the agency’s obligations to follow the
APA process, to produce a rule within its statutory authority, or to adequately explain the result.” Id.; see
5 U.S.C. §559. The Secretary thus cannot adopt a new
rule except through notice-and-comment. 5 U.S.C.
§553(b)-(c). The notice-and-comment process comes after the negotiated-rulemaking process. As it always
does, notice-and-comment “gives affected parties fair
warning of potential changes in the law and an opportunity to be heard on those changes—and it affords
the agency a chance to avoid errors and make a more
informed decision.” Azar v. Allina Health Servs., 139
S.Ct. 1804, 1816 (2019).
B. The HEROES Act
In January 2002, four months after the September 11 terrorist attacks, Congress passed the HEROES Act to “provide the Secretary of Education with
specific waiver authority to respond to conditions in
the national emergency declared by the President on
September 14, 2001.” Pub. L. 107-122, 115 Stat. 2386
(Jan. 15, 2002). The HEROES Act let the Secretary
“waive” and “modify” certain statutory and regulatory
provisions to ensure that student-loan borrowers affected by September 11 were not “placed in a worse
7
position financially.” Id. §2(a)(2)(A). Congress granted
the Secretary this power “so that reservists leaving
their jobs and families may be relieved from making
student loan payments for a time.” 147 Cong. Rec.
H10891, H10892 (Rep. McKeon) (Dec. 19, 2001).
Because of the country’s national emergency, Congress let the Secretary issue the waivers and modifications authorized by the Act without negotiated rulemaking or notice-and-comment. Pub. L. 107-122,
§2(b)(1), (d). The Act was uncontroversial, passing by
voice vote in the House and by unanimous consent in
the Senate. 147 Cong. Rec. H10938 (Dec. 20, 2001);
147 Cong. Rec. S13311 (Dec. 14, 2001).
In August 2003, shortly after the start of the Iraq
War, Congress reauthorized and amended the
HEROES Act. Pub. L. 108-76, 117 Stat. 904 (Aug. 18,
2003). Once again, Congress sought to give “the Reservists who are leaving from their jobs to go overseas
right now relief from making student loan payments
for a period of time while they are away.” 149 Cong.
Rec. H2521, H2522 (Apr. 1, 2003) (Rep. Garrett). The
Act accomplished this goal by letting the Secretary
“waive” and “modify” certain statutory and regulatory
provisions to ensure that student-loan borrowers affected by a war, military operation, or national emergency are not “placed in a worse position financially.”
20 U.S.C. §1098bb(a)(2). The HEROES Act of 2003
was again uncontroversial, passing the Senate by
unanimous consent and the House by a vote of 421-1. 1
1 Representative Miller, the only “nay” vote, later explained
that his vote was a mistake and that he “meant to vote ‘yea.’” 149
Cong. Rec. E663 (Apr. 3, 2003).
8
149 Cong. Rec. H2553 (Apr. 1, 2003); 149 Cong. Rec.
S10866 (July 31, 2003). Following its passage, the Secretary issued waivers and modifications to make it
easier for reservists and other affected individuals to
defer their student-loan payments. 68 Fed. Reg.
69312, 69316 (Dec. 12, 2003).
In 2005, Congress reauthorized the Act for another two years. Pub. L. 109-78, 119 Stat. 2043 (Sept.
30, 2005). The reauthorization was again designed to
“ensure that those men and women serving in Iraq
who have Federal student loans [will] not have to
make payments on those loans while they are serving
overseas.” 151 Cong. Rec. H8111 (Sept. 20, 2005) (Rep.
Van Hollen). As before, the Act passed by voice vote in
the House and by unanimous consent in the Senate.
Id. at H8112; 151 Cong. Rec. S10520 (Sept. 27, 2005).
Following its passage, the Secretary extended the expiration date for the waivers and modifications that
were issued in 2003. 70 Fed. Reg. 61037 (Oct. 20,
2005).
As the wars in Afghanistan and Iraq continued,
Congress made the HEROES Act permanent in 2007.
Pub. L. 110-93, 121 Stat. 999 (Sept. 30, 2007). Congress sought to “send a strong message of support to
our troops” by giving them “the peace of mind that this
program will continue throughout the duration of
their current or any subsequent deployment.” 153
Cong. Rec. H10789, H10790 (Sept 25, 2007) (Rep.
Kline). The Act again passed by voice vote in the
House and by unanimous consent in the Senate. Id. at
H10790-91; 153 Cong. Rec. S12316 (Sept. 27, 2007).
Following the 2007 reauthorization, the Secretary
9
again extended the waivers and modifications that
were made in 2003. 72 Fed. Reg. 72947 (Dec. 26,
2007); see also 77 Fed. Reg. 59311 (Sept. 27, 2012)
(same); 82 Fed. Reg. 45465 (Sept. 29, 2017) (same).
Until now, the Secretary had never forgiven any individual’s student-loan debt through the HEROES Act.
App.293-94.
C. The Debate over Canceling Student Loans
Historically, few elected officials advocated for
broad cancellation of student-loan debts. See Berman,
Where the 2020 Candidates Stand on Student Debt &
College Affordability, MarketWatch (July 30, 2019),
perma.cc/TY4P-D99L. But things changed by 2019.
Many were arguing that “[c]rushing student debt
ha[d] reached crisis levels in America requiring big,
bold solutions.” Press Release, Sen. Warren (July 23,
2019), perma.cc/L9D4-ASRY (quoting Rep. Clyburn).
Canceling student-loan debts, they believed, would
“end the student debt crisis, help millions of struggling families obtain financial stability, and … begin
to close the racial wealth gap.” Id.
During the 2019-2020 legislative session, “[m]ore
than 80 student loan forgiveness bills and other student loan legislation [were] introduced” in Congress.
Kantrowitz, Year in Review: Student Loan Forgiveness Legislation, Forbes (Dec. 24, 2020), perma.cc/
RKW4-TEJW. For example, in July 2019, Representative Clyburn and Senator Warren proposed the Student Loan Debt Relief Act of 2019, which would have
cancelled up to $50,000 in student-loan debt for every
person with a household income of $100,000 or less.
See H.R. 3887, 116th Cong. §101(b) (2019); S. 2235,
10
116th Cong. §101(b) (2019). Opponents argued, among
other things, that broad debt forgiveness was “fundamentally unfair” because it would force union members, community-college graduates, and other taxpayers to subsidize wealthier individuals who had borrowed heavily to receive “great degrees.” Hearing Before the H. Comm. on Fin. Servs., 116th Cong. 56
(Sept. 10, 2019) (Rep. Duffy). The 116th Congress declined to pass any debt-forgiveness bill.
In the run-up to the 2020 election, nearly every
Democratic presidential candidate proposed some
type of student-loan forgiveness. Nova, Where the
2020 Democratic Candidates Stand on Student Debt,
CNBC (Sept. 21, 2019), perma.cc/AF47-JRNY. Thencandidate Biden proposed to “forgive all undergraduate tuition-related federal student debt from two- and
four-year public colleges and universities for debtholders earning up to $125,000.” Sen. Biden, Joe
Biden Outlines New Steps to Ease Economic Burden
on Working People, Medium (Apr. 9, 2020), perma.cc/
X3ZN-X27T. Weeks before the election, Biden reiterated his commitment, promising that “I’m going to
eliminate your student debt if you come from a family
[making less] than $125,000 and went to a public university.” Minsky, Biden Affirms: “I Will Eliminate
Your Student Debt,” Forbes (Oct. 7, 2020), perma.cc/
8NXW-79X4.
Following the presidential election, many elected
officials urged the President to cancel debts through
executive action. Most prominently, Senator Schumer, Representative Pressley, and others introduced
11
resolutions urging the President “to take executive action to broadly cancel Federal student loan debt.” S.
Res. 46, 117th Cong. (Feb. 8, 2021); H. Res. 100, 117th
Cong. (Feb. 4, 2021). According to these resolutions,
the President could act unilaterally because “Congress ha[d] already granted the Secretary of Education the legal authority to broadly cancel student debt
under section 432(a) of the Higher Education Act of
1965 (20 U.S.C. 1082(a)).” Id. (emphasis added); see
20 U.S.C. §1082(a) (“[T]he Secretary may … compromise, waive, or release any right, title, claim, lien, or
demand, however acquired.”). In response, the President asked the Secretary to draft a memorandum outlining his legal authority to forgive student loans.
Egan, Biden to Review Executive Authority to Cancel
Student Debt, NBC News (Apr. 1, 2021), perma.cc/
849S-FC5A.
D. The Debt Forgiveness Program
In the summer of 2022, reports emerged that the
White House was considering forgiving student-loan
debt for tens of millions of borrowers. See Pager, Latest White House Plan Would Forgive $10,000 in Student Debt Per Borrower, Wash. Post (May 27, 2022),
perma.cc/QUN2-X9QX. But instead of promulgating a
new rule through negotiated rulemaking and noticeand-comment, executive-branch officials secretly debated and decided the countless issues implicated by
broadscale debt relief, including the amount of debt to
forgive, the types of loans to cover, the metrics for
identifying borrowers in need, the program’s effects on
inflation, the Secretary’s legal authority, and more.
App.176-81.
12
On August 24, the White House announced that it
would immediately implement a new debt-forgiveness
program. App.195. Under the Program, those who received a Pell Grant in college would get up to $20,000
in debt forgiveness, while those who did not would get
$10,000. App.258. Although “[m]ost federal student
loans” would qualify, individuals with federal loans
that are commercially held and not in default would
not be eligible. App.199-201. Borrowers in the top 5%
of incomes—individuals making more than $125,000
individually or $250,000 as a household—also were ineligible. App.258; Fact Sheet, The White House (Aug.
24, 2022), perma.cc/4AWB-5E6W. Though prior executive loan-forgiveness proposals had focused on the
HEA, the Government claimed that its new program
was authorized by the HEROES Act. App.258-59. This
legal justification was widely criticized, even by those
supporting debt cancellation. See, e.g., Shugerman,
Biden’s Student-Debt Rescue Plan Is a Legal Mess,
The Atlantic (Sept. 4, 2022), perma.cc/SA7E-MJYB
(acknowledging that “COVID is not the real reason for
such a sweeping program” and criticizing the Department for not relying on Section 1082 of the HEA,
whose purpose “fit[s] the real structural social reasons
for the Biden administration’s broad policy”).
For most of September, the Government told the
public that “borrowers with privately held federal student loans, such as through the FFEL … progra[m],
can receive this relief by consolidating these loans into
the Direct Loan Program.” App.201. But in late September, after six States filed suit, the Government
changed course, announcing that “[a]s of Sept. 29,
2022,” borrowers with federal student loans that are
13
privately held “cannot obtain one-time debt relief by
consolidating those loans into Direct Loans.” App.215.
The Government promised to continue “assessing
whether there are alternative pathways to provide relief” to borrowers with these loans, “including FFEL
Program … Loans.” App.216.
On September 27, a month after announcing the
Program, the Secretary sent a memorandum to two
Department officials stating that he was implementing the Program by “issuing waivers and modifications” through the HEROES Act. App.261-62. The
Secretary instructed these officials to implement the
Program immediately. App.262.
On October 12, the Secretary published a document in the Federal Register that purported to implement the Program by “modif[ying]” certain statutory
and regulatory provisions. 87 Fed. Reg. 61512, 61514
(Oct. 12, 2022). Specifically, the Secretary claimed to
“modif[y]” five sets of provisions that authorize certain
loan discharges. Id. at 61514 (citing 20 U.S.C. §1087;
20 U.S.C. §1087dd(g); 34 C.F.R. Part 674, Subpart D;
34 C.F.R. §§682.402, 685.212). Through these supposed “modifications,” the Secretary claimed the authority to discharge loans according to the Program’s
specific terms. Id.
The administrative record contains no estimate of
the Program’s costs, but the nonpartisan Congressional Budget Office estimates that the Program will
cost over $400 billion. Costs of Suspending Student
Loan Payments and Canceling Debt, Cong. Budget
14
Off. (Sept. 26, 2022), perma.cc/2N85-PRGL. That figure is four times bigger than the Department of Homeland Security’s annual budget, Agency Profiles, USAspending.gov, perma.cc/H7AA-B3EZ, and 47 times bigger than the estimated cost of the EPA’s Clean Power
Plan, Clean Power Plan By The Numbers, EPA (Aug.
3, 2015), perma.cc/5PJG-PNSR. Other economists put
the number even higher, estimating that the Program
will cost between $469 and $519 billion. App.108.
E. Proceedings Below
Respondent Myra Brown is a graduate of the University of Texas at El-Paso and the Cox School of Business at Southern Methodist University. App.188. To
pay for her studies, she received FFEL loans. App.188.
Brown currently has more than $17,000 in federal student-loan debt. App.188. Yet she is ineligible for debt
forgiveness under the Program because her loan is
commercially held and not in default. App.189.
Respondent Alexander Taylor is a graduate of the
University of Dallas. App.190. To pay for his studies,
Taylor received student loans through the Direct Loan
Program. App.190. He currently has more than
$35,000 in federal student-loan debt. App.190. Yet
Taylor is ineligible for the full $20,000 in debt forgiveness because his parents made too much money
for him to receive a Pell Grant in college. App.190-91.
If the Secretary is going to provide debt forgiveness, Respondents believe that their debts should
be forgiven too. App.189, 191. In their view, it is irrational, arbitrary, and unfair to exclude Brown from
the Program just because her debt is commercially
15
held and not in default and to deny Taylor full debt
forgiveness based on the financial circumstances of
his parents many years ago. App.189, 191. In fact,
Taylor makes less than $25,000 a year, yet others
making more than five times as much (up to $125,000
a year) will receive $20,000 in debt forgiveness because they received a Pell Grant. App.191. Respondents want an opportunity to present their views to the
Government and to provide additional comments on
any proposal to forgive student-loan debts. App.189,
191.
On October 10, Respondents sued the Government, claiming that it violated the APA by adopting
the Program without conducting negotiated rulemaking or providing notice and an opportunity to comment. App.184-85. Respondents asked the district
court to declare the Program unlawful, to enjoin the
Government from implementing it, and to vacate it.
App.186. Respondents moved for a preliminary injunction, which the district court later converted into
a motion for summary judgment. App.272-75.
On November 10, the district court granted summary judgment to Respondents and vacated the Program. The district court first held, correctly, that Respondents had standing. App.277-82. Respondents
were injured because they “alleged deprivation of
their procedural right[s]” and have a “concrete interest in having their debts forgiven to a greater degree.”
App.277-80. Their injuries were traceable to the Government’s actions because they “lost the chance to obtain more debt forgiveness, which flows directly from
Defendants’ promulgation of the Program’s eligibility
16
requirements that failed to undergo a notice-and-comment period.” App.280-81. And there was “at least
some possibility that Defendants would reconsider the
eligibility requirements of the Program if it were enjoined or vacated, which fulfills the lighter redressability requirement that applies when a procedural injury is alleged.” App.281-82.
On the merits, the district court held, incorrectly,
that the Government “did not violate the APA’s procedural requirements.” App.285-87. The court did not
address the Secretary’s failure to adopt the rule
through negotiated rulemaking. But on the APA, the
court concluded that “the Secretary may waive or
modify any provision without notice and comment under the HEROES Act” as long as he “publish[es]” his
actions in the Register. App.287. In other words, the
court believed that the Secretary could disregard the
APA’s notice-and-comment requirement merely by
saying that he was acting pursuant to the HEROES
Act, even if the Program was not actually authorized
by the HEROES Act. App.287. In fact, the district
court later agreed with Respondents that the HEROES Act does not authorize the Program. App.28794.
Turning to that “substantive” question, the district court held that the Secretary had no authority to
implement the Program under the HEROES Act.
App.287-94. As an initial matter, the court found that
the major-questions doctrine applied. App.288-91.
The Program has “vast economic significance” because
it “will cost more than $400 billion,” far more than the
amount at stake in the eviction-moratorium case.
17
App.289 (citing Ala. Realtors, 141 S.Ct. at 2489 (describing an economic impact of $50 billion)). The Program also has “vast political significance” because
“Congress has introduced multiple bills to provide student loan relief” in similar circumstances and “all
have failed.” App.289-90.
Applying the major-questions doctrine, the district court found no “‘clear congressional authorization’” under the HEROES Act to implement the Program. App.291-94 (quoting West Virginia v. EPA, 142
S.Ct. 2587, 2614 (2022)). In particular, the HEROES
Act “does not mention loan forgiveness,” and the
“‘broad’” and “‘general’” provisions that the Government pointed to don’t “supply a clear statement” authorizing this sweeping relief. App.291-93. Also relevant was the fact that the Department has never relied on the HEROES Act to cancel student loans.
App.293-94. Recognizing that the “‘ordinary’” remedy
under the APA is “‘to vacate unlawful agency action,’”
the court declared the Program unlawful and vacated
it. App.294-95, 297.
On November 17, the Government filed an emergency motion with the Fifth Circuit to stay the judgment pending appeal. The Fifth Circuit denied the
motion. App.308. On December 2, the Government
filed a motion with this Court to stay the judgment
pending appeal. The Court treated the application as
a petition for a writ of certiorari before judgment and
granted the petition. App.309. Over the Government’s
objection, the Court modified the questions presented
to specifically review whether the Program “was
18
adopted in a procedurally proper manner.” App.309;
see BIO.3, 28-29; Reply.2, 9-10.
SUMMARY OF ARGUMENT
The Higher Education Act and the Administrative
Procedure Act require all regulations pertaining to
student loans to be adopted through negotiated rulemaking and notice-and-comment. Yet the Secretary
adopted the Debt Forgiveness Program without using
either procedure. Instead, he simply labeled his directives as “modifications” under the HEROES Act, a
statute that plainly doesn’t authorize the Program.
Respondents thus lost an opportunity to obtain debt
forgiveness: Brown will have none of her debts forgiven, and Taylor will receive only half of the full
$20,000. Respondents have standing to remedy these
injuries, and the Government violated the HEA and
APA by failing to follow the proper procedures.
A plaintiff suffers an injury-in-fact when he is deprived of “a procedural right to protect his concrete interests.” Lujan, 504 U.S. at 572 n.7. When plaintiffs
assert a violation of procedural rights, “the normal
standards for redressability and immediacy” do not
apply. Id. A plaintiff “‘who alleges a deprivation of a
procedural protection to which he is entitled never has
to prove that if he had received the procedure the substantive result would have been altered.’” Massachusetts v. EPA, 549 U.S. 497, 518 (2007). Instead,
“[w]hen a litigant is vested with a procedural right,
that litigant has standing if there is some possibility
that the requested relief will prompt the injury-causing party to reconsider the decision that allegedly
harmed the litigant.” Id.
19
Here, Respondents have shown an injury-in-fact
because the Secretary failed to follow the proper procedures (negotiated rulemaking and notice-and-comment) and Respondents have “a concrete interest that
is affected by the deprivation” of those rights, Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009)—
namely, the lost opportunity to have their debts forgiven. Respondents’ injuries are traceable to the Secretary’s decision to exclude them from the Program.
App.280. And Respondents’ injuries are redressable
because there is at least “some possibility” that the relief they seek “will prompt [the Secretary] to reconsider [his] decision.” Massachusetts, 549 U.S. at 518.
The Government doesn’t dispute that Respondents have shown an injury-in-fact and causation. It instead argues that Respondents’ injuries aren’t redressable because a ruling in Respondents’ favor
would mean that no one could receive debt forgiveness
“under the HEROES Act.” Br.32-33. But that framing
is wrong. The question for purposes of standing is
whether the Secretary could reconsider his decision to
withhold debt forgiveness from Respondents if he follows the proper procedures. Although the Secretary
lacks authority under the HEROES Act, the HEA authorizes him to “compromise, waive, or release any
right, title, claim, lien, or demand.” 20 U.S.C.
§1082(a). And there is “some possibility” that he would
forgive Respondents’ debts under the HEA once this
Court holds that he cannot avoid his rulemaking obligations by invoking the inapplicable HEROES Act.
Massachusetts, 549 U.S. at 518. Article III requires
nothing more.
20
The Government’s only other standing argument
is that Respondents cannot raise the “substantive
claim” on which the district court granted relief.
Br.31. But as the Government knows, Respondents
never brought a “substantive claim,” App.184-86, and
they don’t seek affirmance on that ground now. Although the district court correctly found that the
HEROES Act does not authorize the Program, it erred
by holding that the Secretary followed the proper procedures.
It is precisely because the HEROES Act does not
authorize the Program that the Secretary had to use
the procedures required by the HEA and APA. The
HEROES Act excuses the Secretary’s rulemaking obligations only when the waivers and modifications are
authorized by that Act. 20 U.S.C. §1098bb(b)(1), (d).
The Secretary cannot bypass the APA and HEA
simply by saying that the HEROES Act applies. If the
Program isn’t authorized by the HEROES Act, then
the Secretary has no “lawful excuse for neglecting
[his] statutory [negotiated-rulemaking] and noticeand-comment obligations.” Azar, 139 S.Ct. at 1808.
The district court’s judgment can be affirmed on this
alternative ground, as this Court understood when it
rewrote the Government’s questions presented to include whether the Program was “adopted in a procedurally proper manner.” App.309.
The HEROES Act plainly doesn’t authorize the
Program. To start, this is a textbook case for the major-questions doctrine. The Program has vast economic and political significance, as it would cancel
21
nearly half-a-trillion dollars in debt for tens of millions of individuals. And despite ample opportunity
over the past two decades, the Department has never
cancelled a single student’s debt through the HEROES Act. The Act comes nowhere close to providing
“‘clear congressional authorization’” for the Program.
West Virginia, 142 S.Ct. at 2609.
But the HEROES Act doesn’t authorize the Program even without the major-questions doctrine. The
Program far exceeds the Secretary’s limited power to
“modify” statutory and regulatory provisions. Instead
of making “moderat[e]” and “minor” changes, the Program fundamentally rewrites the statutory scheme.
MCI Tel. Corp. v. AT&T, 512 U.S. 218, 225 (1994).
Moreover, the Secretary can act only to ensure that
borrowers “are not placed in a worse position financially,” 20 U.S.C. §1098bb(a)(2)(A) (emphasis added),
but the Program places every borrower in a better position than before the pandemic. And even if the Government could justify the use of the HEROES Act for
a small subset of borrowers, it could never show that
all borrowers (except those in the top 5% of incomes)
require debt forgiveness to avoid delinquency and default.
In the end, because the Program isn’t authorized
by the HEROES Act, the Government has no excuse
for ignoring its rulemaking obligations. The judgment
below should be affirmed.
22
ARGUMENT
Respondents have Article III standing to bring
their procedural claim. The Government’s only defense to that claim is that the HEROES Act exempts
the Program from negotiated rulemaking and noticeand-comment. But that defense fails because the HEROES Act does not, in fact, authorize the Program.
I.
Respondents have standing.
Article III requires standing. Collins v. Yellen, 141
S.Ct. 1761, 1779 (2021). To establish it, a plaintiff
must show that he “suffered an ‘injury in fact’ that is
‘fairly traceable’ to the defendant’s conduct and would
likely be ‘redressed by a favorable decision.’” Id. (quoting Lujan, 504 U.S. at 560-61).
This test is less demanding when a plaintiff asserts the violation of “a procedural right to protect his
concrete interests.” Lujan, 504 U.S. at 572 n.7. Because “procedural rights” are “special,” a plaintiff can
sue “without meeting all the normal standards for redressability and immediacy.” Id. It’s enough to show
“some possibility” that the requested relief “will
prompt the injury-causing party to reconsider the decision.” Massachusetts, 549 U.S. at 518. The Government doesn’t dispute this principle, which comes from
a trio of environmental cases.
The Court first explained the laxer test for procedural rights in Lujan. There, environmental organizations challenged a rule that exempted interagency
consultation for certain actions taken in foreign nations. 504 U.S. at 558-59. The plaintiffs alleged that
23
they had standing because the ESA’s citizen-suit provision gave them a “procedural right” to challenge an
agency’s failure to follow the statutory consultative
procedure. Id. at 571-72. Writing for the Court, Justice Scalia recognized that “procedural rights” are
“special.” Id. at 572 n.7. A person “who has been accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability and immediacy.” Id.
For example, a person “living adjacent to the site for
proposed construction of a federally licensed dam has
standing to challenge the licensing agency’s failure to
prepare an environmental impact statement.” Id.
That plaintiff has standing “even though he cannot establish with any certainty that the statement will
cause the license to be withheld or altered, and even
though the dam will not be completed for many years.”
Id. Individuals likewise have standing to enforce a
“procedural requirement for a hearing prior to denial
of their license application.” Id. at 572. The plaintiffs
in Lujan could not take advantage of this doctrine,
however, because they couldn’t identify any concrete
interest protected by their asserted procedural right.
Id. at 573-74 & n.8.
The plaintiffs in Massachusetts v. EPA successfully invoked this doctrine. There, Massachusetts
challenged the EPA’s refusal to regulate greenhouse
gas emissions from motor vehicles. 549 U.S. at 510-14.
Through the Clean Air Act, Congress had given Massachusetts a “procedural right to challenge the rejection of its rulemaking petition as arbitrary and capricious.” Id. at 520. The Court recognized that, “[w]hen
24
a litigant is vested with a procedural right, that litigant has standing if there is some possibility that the
requested relief will prompt the injury-causing party
to reconsider the decision that allegedly harmed the
litigant.” Id. at 518. Massachusetts had standing because its procedural right protected its quasi-sovereign interests, including the alleged risk of harm to its
coastal lands due to rising sea levels. Id. at 521-23. Its
ownership of this territory showed that its stake in the
outcome of the case was “sufficiently concrete to warrant the exercise of federal judicial power.” Id. at 519.
Because there was “some possibility that the requested relief [would] prompt [EPA] to reconsider [its]
decision,” Massachusetts had standing to challenge
EPA’s refusal to regulate. Id. at 518-21. The state had
standing even though, on remand, the EPA still might
decide not to regulate the greenhouse gases. Id. at
534-35.
This Court addressed procedural rights again in
Summers. The environmental groups there challenged the Forest Service’s approval of a sale of timber
known as the Burnt Ridge Project. 555 U.S. at 491.
The groups alleged that the Service approved the project without providing notice, an opportunity to comment, and a procedure to appeal, as required by law.
Id. at 490-91. This Court agreed that the plaintiffs had
alleged a cognizable injury “in their challenge to the
Burnt Ridge Project” because they “claim[ed] that but
for the allegedly unlawful abridged procedures they
would have been able to oppose the project that
threatened to impinge on their concrete plans to observe nature in that specific area.” Id. at 497. The
plaintiffs alleged standing “despite the possibility that
25
[their] allegedly guaranteed right to comment would
not be successful in persuading the Forest Service to
avoid impairment of [their] concrete interests.” Id.
But because the parties had settled their dispute over
the Burnt Ridge Project and the plaintiffs couldn’t
identify any other “concrete interest” affected by the
deprivation of their procedural rights, the plaintiffs
lacked standing. Id. at 496-97.
These cases dictate the result here. Respondents
were deprived of their “procedural right[s] to protect
[their] concrete interest” when the Government promulgated the Program without negotiated rulemaking
and notice-and-comment, Lujan, 504 U.S. at 572 n.7,
and there is “some possibility” that vacating the Program will prompt the Government to reconsider its decision to deny them debt forgiveness, Massachusetts,
549 U.S at 521. And unlike the plaintiffs in Lujan and
Summers, Respondents haven’t alleged a “procedural
right in vacuo.” Summers, 555 U.S. at 496. Respondents have federal student loans that are not being forgiven under the Program but could be if the Secretary
followed the proper procedures. Their lost opportunities to obtain monetary relief are “concrete interests”
separating Respondents from the general public.
Lujan, 504 U.S. at 572 n.7; see also Spokeo, Inc. v. Robins, 578 U.S. 330, 339 n.7 (2016) (“The fact that an
injury may be suffered by a large number of people
does not of itself make that injury a nonjusticiable
generalized grievance.”). Respondents satisfy all three
requirements for standing.
26
Injury-in-Fact. The Government doesn’t dispute
that Respondents have an injury-in-fact. Br.31-33. Respondents were deprived of their “procedural right[s]
to protect [their] concrete interests.” Lujan, 504 U.S.
at 572 n.7.
Respondents plainly have procedural rights. Specifically, the Secretary failed to follow the mandatory
two-step process for promulgating regulations on student loans: (1) develop the rule through negotiated
rulemaking, 20 U.S.C. §1098a(a)(1); and (2) provide
notice of the rule and an opportunity to comment,
5 U.S.C. §553(b)-(c); see also 5 U.S.C. §§702, 706(2)(D)
(agencies that act “without observation of procedure
required by law” can be sued). Although the Government disputes that negotiated rulemaking and noticeand-comment are required, “[f]or standing purposes”
the Court must “accept as valid the merits of [Respondents’] legal claims.” FEC v. Cruz, 142 S.Ct. 1638,
1647-48 (2022).
Respondents also have “a concrete interest that is
affected by the deprivation” of these rights. Summers,
55 U.S. at 496. The Secretary is pursuing a program
of debt forgiveness, and Respondents want their debts
forgiven. App.189, 191. But under the Program,
Brown will get no debt relief, and Taylor will receive
less debt relief. Both are down $10,000. This “pocketbook injury” is a “prototypical form of injury in fact.”
Collins, 141 S.Ct. at 1779.
That Respondents’ interests are affected by the
deprivation of these procedures isn’t surprising; their
interests are exactly what negotiated rulemaking and
27
notice-and-comment are “designed to protect.” Lujan,
504 U.S. at 573 n.8. Through the HEA, Congress ordered the Secretary to “obtain the advice of and recommendations from individuals … involved in student financial assistance programs,” including from
current and former “students.” 20 U.S.C. §1098a(a)(1);
see, e.g., 88 Fed. Reg. 1894, 1897 (Jan. 11, 2023) (placing “student loan borrowers” on a negotiated-rulemaking committee). And notice-and-comment requirements “ensure that affected parties”—like Respondents—“have an opportunity to participate in
and influence agency decision making at an early
stage, when the agency is more likely to give real consideration to alternative ideas.” U.S. Steel Corp. v.
EPA, 595 F.2d 207, 214 (5th Cir. 1979); see Chrysler
Corp., 441 U.S. at 316 (the APA promotes “fairness
and informed administrative decisionmaking” by “affording interested persons notice and an opportunity
to comment”).
That Respondents have no legal entitlement to
debt forgiveness doesn’t mean that they lack concrete
interests. For example, applicants for a license have
no legal entitlement to it, yet they have standing to
enforce a “procedural requirement for a hearing prior
to denial of their license application.” Lujan, 504 U.S.
at 572; see, e.g., Ashbacker Radio Corp. v. FCC, 326
U.S. 327, 333-34 (1945) (standing to challenge the denial of a broadcasting license without a hearing). Individuals similarly have standing when they are deprived of an opportunity to pursue a benefit. See, e.g.,
Czyzewski v. Jevic Holding Corp., 580 U.S. 451, 464
(2017) (standing where the plaintiffs “lost a chance to
obtain a settlement”); Ne. Fla. Chapter, Assoc. Gen.
28
Contractors of Am. v. Jacksonville, 508 U.S. 656, 666
(1993) (standing to challenge a government-erected
“barrier that makes it more difficult for members of
one group to obtain a benefit”); Casillas v. Madison
Ave. Ass’n, 926 F.3d 329, 334 (7th Cir. 2019) (Barrett,
J.) (standing based on the plaintiff’s “lost opportunity
to try to change [an employer’s] opinion of her”). Respondents’ lost opportunity to obtain debt forgiveness
is no different.
Causation. The Government also doesn’t dispute
causation. Br.31-33. Respondents’ injuries are clearly
traceable to the Secretary’s actions because their “‘lost
chance’” to obtain debt forgiveness “flows directly from
[the Government’s] promulgation of the Program’s eligibility requirements.” App.280; see Czyzewski, 580
U.S. at 464 (standing where bankruptcy order caused
plaintiffs to “los[e] a chance to obtain a settlement”).
A plaintiff who alleges a deprivation of a procedural
right “‘never has to prove that if he had received the
procedure the substantive result would have been altered.’” Massachusetts, 549 U.S. at 518; see Lujan, 504
U.S. at 572 n.7 (rejecting “the Government’s argument that, even if the other agencies were obliged to
consult with the Secretary, they might not have followed his advice”); Seila Law LLC v. CFPB, 140 S.Ct.
2183, 2196 (2020) (plaintiffs are “not required to prove
that the Government’s course of conduct would have
been different in a ‘counterfactual world’ in which the
Government had acted with constitutional authority”).
Redressability. Respondents’ injuries are redressable because there is “some possibility” that the
29
relief Respondents seek “will prompt [the Secretary]
to reconsider [his] decision” to withhold debt forgiveness from them. Respondents sought, among
other things, a declaration that the Secretary failed to
follow the proper procedures and an order vacating
the Program. App.186. Because vacatur “neither compels nor restrains further agency decision-making,”
Texas v. United States, 40 F.4th 205, 220 (5th Cir.
2022), the Secretary would remain free to lawfully
pursue a new debt-forgiveness program through the
proper rulemaking procedures, see Summers, 555 U.S.
at 497 (judgment for plaintiffs could redress failure to
provide notice-and-comment); see also App.117-19,
128-29, 267 (describing the President’s “campaign
commitment” to forgive student-loan debts).
The Government argues that Respondents’ injuries aren’t redressable because a ruling in their favor
“would mean that no one could receive debt-cancellation relief under the HEROES Act.” Br.32-33 (emphasis added). But whether the Government could forgive
Respondents’ debts “under the HEROES Act” isn’t the
proper inquiry. The question is whether the Secretary
could “reconsider [his] decision” to withhold debt forgiveness from Respondents. Massachusetts, 549 U.S.
at 518. In this context, Article III asks whether the
agency could have made a different decision had it followed the proper procedures, not whether it could
have made a different decision had it continued violating its procedural obligations. Id.; see Summers,
555 U.S. at 497. This Court has never described the
redressability inquiry as limited to a particular theory
of statutory authority. See, e.g., Summers, 555 U.S. at
497 (redressability where the agency could reconsider
30
its decision to approve a timber-sale project); Lujan,
504 U.S. at 572 n.7 (redressability where the agency
could reconsider its decision to construct a dam). The
“relevant inquiry” turns on the Government’s “‘allegedly unlawful conduct,’” not on any particular “provision of law.” Collins, 141 S.Ct. at 1779.
The Government’s myopic focus on the HEROES
Act makes sense only if that statute were the only authority for student-loan forgiveness. But that premise
isn’t correct. The HEA gives the Secretary the power
to “compromise, waive, or release any right, title,
claim, lien, or demand.” 20 U.S.C. §1082(a)(6); see also
id. §§1087hh(2), 1087e(a)(1). The Government itself
boasts that the HEA allows for “substantial” debt forgiveness and that the Secretary has used it “many
times” to “discharg[e] debts owed by student-loan borrowers, including on a class-wide basis and for substantial amounts.” Br.3-4 & n.1 (listing examples).
And it’s not just the Government. Dozens of elected
officials have urged the Secretary to use the HEA to
broadly forgive student-loan debts. S. Res. 46, 117th
Cong. (Feb. 8, 2021); H. Res. 100, 117th Cong. (Feb. 4,
2021). Multiple legal scholars have too. See, e.g., Hunt,
Jubilee Under Textualism, 48 J. Legis. 31, 37-39
(2021); Herrine, The Law and Political Economy of a
Student Debt Jubilee, 68 Buff. L. Rev. 281, 341-43
(2020). And, of course, a ruling that the Program isn’t
authorized by the HEROES Act wouldn’t preclude the
Secretary from forgiving Respondents’ debts under
the HEA.
31
Importantly, the Government has never disputed
that a properly promulgated debt forgiveness program—one where Respondents’ and others’ voices
were heard—could forgive Respondents’ debts. For
Brown, the Secretary has repeatedly expressed an interest in “expand[ing] eligibility to borrowers [like
Brown] with privately owned federal student loans.”
App.201. Indeed, until the States sued, the Government allowed (and encouraged) borrowers with privately held federal loans to obtain debt forgiveness by
“consolidating these loans into the Direct Loan Program.” App.201, 215. For Taylor, he is being arbitrarily denied $10,000 in forgiveness because he did not
receive a Pell Grant years ago. His level of debt forgiveness could easily increase if the Secretary based
eligibility on a more relevant metric, such as current
income. In fact, Taylor makes less than $25,000 a
year, but individuals making exponentially more than
that ($250,000 for joint filers or $125,000 for individuals) will receive $20,000 in debt forgiveness if they
received a Pell Grant. App.190-91, 196. The Secretary
could reconsider this arbitrary line if forced to hear
32
from low-income borrowers and defend his decision in
negotiated rulemaking and notice-and-comment. 2
The Government’s remaining argument is that
Respondents “lack standing to raise the substantive
claim on which the district court granted relief.”
Br.31. But as the Government recognizes, Br.62, Respondents didn’t bring a claim that the Program was
adopted “in excess of statutory … authority,” 5 U.S.C.
§706(2)(C); App.184-86. And Respondents don’t seek
affirmance on that ground now. The district court correctly found that the Secretary “lacks the authority to
implement the Program under the HEROES Act.”
App.287-94. But this issue is relevant only because
the Government raises the HEROES Act as an excuse
for adopting the Program without negotiated rulemaking and notice-and-comment. Respondents did
2 Despite what the Government argued below, filing a petition for rulemaking “is neither a substitute for nor an alternative
to compliance with the mandatory [rulemaking] requirements.”
Nat’l Tour Brokers Ass’n v. United States, 591 F.2d 896, 902 (D.C.
Cir. 1978); see Seila Law, 140 S. Ct. at 2196 (“While [a contested
removal] is certainly one way to review a removal restriction, it
is not the only way.”). Respondents wouldn’t have the same opportunity to obtain debt forgiveness after the Secretary cancels
nearly half-a-trillion dollars in debt. And unlike a failure to follow the proper rulemaking procedures, it is “‘only in the rarest
and most compelling of circumstances’” that a court “‘overturn[s]
an agency judgment not to institute rulemaking.’” Defs. of Wildlife v. Gutierrez, 532 F.3d 913, 919, 921 (D.C. Cir. 2008).
33
not bring a standalone claim based on the APA’s “substantive requirements.” App.287. 3
The district court’s analytical error matters little,
however, because Respondents have standing to bring
their original procedural claim, and this Court can “affirm the judgment below on alternative grounds.”
Morgan Stanley Capital Grp. Inc. v. Pub. Utility Dist.
No. 1 of Snohomish Cnty., 554 U.S. 527, 552 (2008).
This Court reviews judgments, not opinions, Camreta
v. Greene, 563 U.S. 692, 704 (2011); and it can affirm
the district court’s judgment based on Respondents’
procedural claim alone. Though the Government’s reply will surely boast that Respondents “do not defend
the district court’s reasoning,” that fact is unremarkable. The district court rejected Respondents’ argument that the Program was not adopted in a procedurally proper manner, and so of course Respondents disagree with its reasoning on that point.
Respondents’ procedural claim is independently
and squarely presented. This Court agreed at the certiorari stage—at Respondents’ insistence and over the
Government’s objection—to review whether the Program “was adopted in a procedurally proper manner.”
3 The Government doesn’t argue that Respondents lack
“standing” to dispute—as part of their procedural claim—
whether the Program is authorized by the HEROES Act. That
argument would make little sense. Respondents don’t separately
need standing to rebut an argument that the Government raises
in response to their procedural claim. See Citizens United v. FEC,
558 U.S. 310, 330-31 (2010) (distinguishing arguments from
claims); Little Sisters of the Poor Saints Peter & Paul Home v.
Pennsylvania, 140 S.Ct. 2367, 2379 n.6 (2020) (standing needed
for “each claim for relief”).
34
App.309. It should resolve that claim against the Government on the merits.
II. The Secretary adopted the Program without following the proper procedures.
Under the HEA and APA, the Secretary was required to use negotiated rulemaking and notice-andcomment before adopting the Program, and it is undisputed that the Secretary did not take these steps.
The Government relies solely on the HEROES Act as
its excuse. But that statute relieves the Secretary
from his rulemaking obligations only when he issues
waivers and modifications that are authorized by the
Act. 20 U.S.C. §1098bb(b)(1), (d). The Government’s
argument that it can bypass the APA and HEA simply
by saying that the HEROES Act authorizes the Program—even when it doesn’t—is meritless. Because
the HEROES Act does not authorize the Program, the
baseline rules apply, and the Secretary acted unlawfully by adopting the Program without following the
proper procedures.
A. The Secretary cannot avoid his rulemaking obligations unless the Program
is authorized by the HEROES Act.
The Government has never disputed that, but for
the HEROES Act, the Secretary could adopt the Program only through negotiated rulemaking and noticeand-comment. See Dkt.24 at 3-4 (recognizing that negotiated rulemaking and notice-and-comment are
“otherwise-applicable procedural requirements”). For
good reason. Negotiated rulemaking is required because the Program is a regulation that “pertain[s]” to
35
Title IV of the HEA, the subchapter governing student
loans. 20 U.S.C. §1098a(b)(2). And notice-and-comment is required because the Program is a legislative
“rule” under the APA. 5 U.S.C. §551(4). Specifically,
the Program has the “‘force and effect of law,’” Perez v.
Mortgage Bankers Ass’n, 575 U.S. 92, 96 (2015), and
“‘affect[s] individual rights and obligations’” to repay
debts, Chrysler Corp., 441 U.S. at 302. The Program
also amends “existing regulations” that permit debt
forgiveness only in limited circumstances. Shalala v.
Guernsey Mem’l Hosp., 514 U.S. 87, 100 (1995); see,
e.g., 34 C.F.R. §30.70(a)(1), (e)(1); 81 Fed. Reg. 75926,
75933-34, 76070 (Nov. 1, 2016) (adopting §30.70 after
negotiated rulemaking and notice-and-comment).
Indeed, when promulgating other regulations authorizing debt forgiveness, the Department has used
the proper procedures. For example, one Department
rule governs the “discharge of loans due to death, total
and permanent disability, attendance at a school that
closes, false certification … and unpaid refunds.”
34 C.F.R. §682.402(a). This rule was promulgated and
amended through negotiated rulemaking and noticeand-comment. See, e.g., 81 Fed. Reg. 75926, 75933-34,
76079-80 (Nov. 1, 2016); 67 Fed. Reg. 67048, 67050,
67079-80 (Nov. 1, 2002); 64 Fed. Reg. 58938, 58940,
58960 (Nov. 1, 1999). Again, the Government’s only
excuse for not following the same procedures here is
its claimed authority under the HEROES Act.
The Government points to §1098bb(b)(1) of the
HEROES Act. Br.62-63. That provision states that
“[n]otwithstanding … [the APA], the Secretary shall,
by notice in the Federal Register, publish the waivers
36
or modifications of statutory and regulatory provisions the Secretary deems necessary to achieve the
purposes of this section.” 20 U.S.C. §1098bb(b)(1).
This provision, according to the Government, excuses
the Secretary from the ordinary rulemaking requirements so long as he “determin[es] that the HEROES
Act applies and that waivers or modifications are necessary,” regardless of whether “the HEROES Act actually authorizes the Secretary’s action.” Br.62-63.
This argument fails.
To begin, §1098bb(b)(1) of the HEROES Act says
nothing at all about excusing the Secretary from negotiated rulemaking. That topic is instead addressed
in §1098bb(d) of the Act. Section 1098bb(d), in turn,
states that §1098a (the HEA section requiring negotiated rulemaking) “shall not apply to the waivers and
modifications authorized or required by [the HEROES
Act].” 20 U.S.C. §1098bb(d) (emphasis added). Nothing “require[s]” the Program, so the key question is
whether the Program is “authorized” by the HEROES
Act. If it isn’t, then the Program needed to go through
negotiated rulemaking.
The Government argues that §1098a of the HEA
“has no application” because its negotiated-rulemaking requirements apply only to “proposed regulations”
and the Secretary “need not issue ‘proposed regulations’” because the Act “express[ly] exempt[s] [the Program] from notice-and-comment procedures.” Br.63.
The Government’s premise is wrong because the Program isn’t exempt from the notice-and-comment process, as explained further below. Regardless, §1098a
of the HEA isn’t limited to “proposed regulations.” It
37
states that “[a]ll regulations pertaining” to Title IV
“shall be subject to a negotiated rulemaking.” 20
U.S.C. §1098a(b)(2) (emphasis added). Because the
Program is a “regulation” that pertains to Title IV, the
HEA’s negotiated-rulemaking requirements apply.
Moreover, the Government’s reading would render §1098bb(d) of the HEROES Act superfluous. If the
HEA’s negotiated-rulemaking requirements never apply (because actions taken under the HEROES Act are
never “proposed regulations”), then the HEROES Act
wouldn’t have needed to separately excuse the Secretary from negotiated rulemaking in §1098bb(d). At a
minimum, Congress would have excused the Secretary with much broader language, rather than excusing negotiated rulemaking only for “waivers and modifications authorized or required” by the Act. (Emphasis added.)
The Government’s excuses for bypassing noticeand-comment fare no better. Before an agency can
avoid notice-and-comment, it must show that Congress “expressly” carved out an exception to that procedural requirement. 5 U.S.C. §559. “Exemptions
from the terms of the Administrative Procedure Act
are not lightly to be presumed.” Marcello v. Bonds, 349
U.S. 302, 310 (1955). Any “legislative departure from
the norm must be clear.” Dickinson v. Zurko, 527 U.S.
150, 155 (1999).
Here, the Program falls under no “clear” exception
to notice-and-comment. While the HEROES Act does
38
contain an exception to notice-and-comment, that exception applies only to the modifications that are authorized by the Act:
Notwithstanding … [the APA], the Secretary shall, by notice in the Federal
Register, publish the waivers or modifications of statutory and regulatory provisions the Secretary deems necessary to
achieve the purposes of this section.
20 U.S.C. §1098bb(b)(1) (emphasis added). As reflected by the definite article “the,” subsection (b)(1) is
referencing “the waivers or modifications” that are
“authorized” earlier in subsection (a). See §1098bb(a)
(titled “Waivers and modifications”); §1098bb(a)(1)
(empowering the Secretary to issue “the waivers or
modifications authorized by paragraph (2)” (emphasis
added)); §1098bb(a)(2) (titled “Actions authorized”
(emphasis added)); id. (“The Secretary is authorized to
waive or modify [in five situations]” (emphasis
added)). In other words, subsection (a) authorizes certain waivers and modifications and, when the Secretary exercises that authority, subsection (b)(1) exempts those waivers from notice-and-comment. See
BedRoc Ltd., LLC v. United States, 541 U.S. 176, 185
(2004). Subsection (b)(1) doesn’t let the Secretary unilaterally decide what counts as a waiver or modification authorized by the Act. See, e.g., MCI Tel. Corp.,
512 U.S. at 225 (rejecting an agency’s assertion that
its action was a “modification”).
39
The Government reads subsection (b)(1) as allowing the Secretary to “dee[m]” that a particular regulation is exempt from notice-and-comment, Br.62-63,
but that’s not what the statute says. The word
“dee[m]” modifies “necessary to achieve the purposes
of this section,” not “waivers or modifications.” 20
U.S.C. §1098bb(b)(1). It refers to the Secretary’s policymaking discretion—conferred by subsection (a)—to
determine whether an authorized modification would
serve the Act’s purposes. See §1098bb(a)(1). It does not
give the Secretary the power to “dee[m]” whether
something is a modification authorized by the Act.
The Government’s contrary reading would override
statutory text and grant the Secretary a “breathtaking amount of authority.” Ala. Realtors, 141 S.Ct. at
2488-89.
The Government’s reading further contradicts
longstanding principles of administrative law. “Agencies have never been able to avoid notice and comment
simply by mislabeling their substantive pronouncements.” Azar, 139 S.Ct. at 1812; see CBS v. United
States, 316 U.S. 407, 416 (1942) (“The particular label
placed upon [an action] by [an agency] is not necessarily conclusive, for it is the substance of what the
[agency] has purported to do and has done which is
decisive.”). The Court must “loo[k] to the contents of
the agency’s action, not the agency’s self-serving label,
when deciding whether statutory notice-and-comment
demands apply.” Azar, 139 S.Ct. at 1812. Here, the
Secretary can’t simply label a new rule a “modification” under the HEROES Act; the actions themselves
must “in fact” be modifications that are authorized by
the Act. Id. at 1811-12.
40
Indeed, if labels alone were decisive, the Secretary
could rewrite the Department’s regulations simply by
invoking the HEROES Act, and no one could ever
challenge his failure to follow the proper procedures.
Congress doesn’t create such obvious loopholes to the
rulemaking process. See Action on Smoking & Health
v. CAB, 713 F.2d 795, 800 (D.C. Cir. 1983) (permitting
an agency “to forgo notice and comment procedures”
through “[b]ald assertions” that “good cause” exists
would “permit the [APA’s] exceptions to carve the
heart out of the statute”). Nothing in the HEROES Act
supports such a clear “legislative departure from the
norm.” Dickinson, 527 U.S. at 155.
The Government contends that allowing a procedural challenge to its actions would mean that plaintiffs could “reconceptualiz[e]” “substantive challenges
… as procedural claims” and thereby “end-run” the
“‘normal standards for redressability and immediacy.’” Br.63-64. But Respondents have challenged only
the Secretary’s failure to follow the proper procedures.
App.184-86. True, Respondents’ procedural claim requires this Court to determine whether the HEROES
Act authorizes the Program, but that feature of the
case is the Government’s fault, not Respondents’. The
Government is the one pointing to the HEROES Act
as its defense for not using negotiated rulemaking and
notice-and-comment, and so now it must defend that
assertion of authority. See Sorenson Comm. v. FCC,
755 F.3d 702, 706-07 (D.C. Cir. 2014) (an agency invoking the “good cause” exception to notice-and-comment has the burden to prove it applies). Taking the
Government’s word for it would let agencies “end-run”
41
the important procedural constraints that Congress
placed on their authority.
Simply put, if the HEROES Act doesn’t authorize
the Program, then the Act’s exceptions to the rulemaking process don’t apply. And as explained below,
it is not so authorized.
B. The HEROES Act does not authorize the
Program.
When a statute “confers authority upon an administrative agency, that inquiry must be ‘shaped, at least
in some measure, by the nature of the question presented’—whether Congress in fact meant to confer the
power the agency has asserted.” West Virginia, 142
S.Ct. at 2607-08. In the ordinary case, “that context
has no great effect on the appropriate analysis.” Id.
But “there are ‘extraordinary cases’ that call for a different approach—cases in which the ‘history and the
breadth of the authority that [the agency] has asserted,’ and the ‘economic and political significance’ of
that assertion, provide a ‘reason to hesitate before
concluding that Congress’ meant to confer such authority.” Id. In these “major questions” cases, the
Court demands “something more than a merely plausible textual basis for the agency action.” Id. at 2609.
The agency instead “must point to ‘clear congressional
authorization’ for the power it claims.” Id.
This case has all the hallmarks of a major questions case. Four points stand out.
First, the Program has “vast ‘economic and political significance.’” Ala. Realtors, 141 S.Ct. at 2489.
42
The Program will cancel the debts of 40 million borrowers at a cost of more than 400 billion dollars.
App.289, 303. That’s no “‘everyday exercise of federal
power.’” NFIB v. OSHA, 142 S.Ct. 661, 665 (2022). Indeed, the “size [and] scope” of the Program are considerably larger than other cases applying the majorquestions doctrine. E.g., Ala. Realtors, 141 S.Ct. at
2489 (eviction moratorium would affect “between 6
and 17 million tenants” and have an “economic impact” of $50 billion); NFIB, 142 S.Ct. at 666 (OSHA’s
mandate would have imposed “billions of dollars in
unrecoverable compliance costs”).
In addition, loan forgiveness has long been “the
subject of an ‘earnest and profound debate’ across the
country.” Gonzales v. Oregon, 546 U.S. 243, 267
(2006). Forgiving student debt raises a host of contentious issues—whether forgiveness mostly benefits the
rich, whether it fuels inflation or the rising cost of college, whether it’s unfair to those who already repaid
their loan or didn’t attend college, where to draw the
line, how much to spend, and much more. Indeed, the
Secretary provided debt forgiveness “that Congress
ha[s] conspicuously and repeatedly declined to enact
itself.” West Virginia, 142 S.Ct. at 2610; see App.26566, 289-90; see also Pub. L. 116-136, §3508(c), 134 Stat
281, 398 (Mar. 27, 2020) (CARES Act authorizing loan
cancellation only for those borrowers who “withdra[w]
from the institution of higher education during the
payment period as a result of” COVID-19). And the
Program is enormously controversial. See, e.g., Shear,
Biden Gave in to Pressure on Student Debt Relief After
Months of Doubt, N.Y. Times (Aug. 26, 2022), perma.
cc/T75A-3J9L (noting that the Program has “drawn
43
fierce criticism from Republicans, who describe it as a
costly giveaway to many who do not deserve it,” and
“ignited an intense debate about the economic consequences”).
Contrast the political stalemate over loan forgiveness with the congressional unity on the HEROES
Act. In the Act’s authorization and three subsequent
reauthorizations, only one legislator ever voted
against the bill—and it was an accident. Supra n.1.
The Act was uncontroversial because Congress
thought it was doing little more than relieving activeduty military from “making student loan payments for
a period of time while they are away.” 149 Cong. Rec.
H2521, H2522 (Apr. 1, 2003) (Rep. Garrett). Over and
over, legislators recognized this purpose. 4 The Government identifies not a shred of evidence that Congress believed it was authorizing the Secretary to cancel debts—let alone cancel nearly half-a-trillion dollars in debt for tens of millions of borrowers.
The Government conceded below that “this is a
case of economic and political significance.” App.290.
Its efforts to backtrack now fail. On its face, a half4 See, e.g., 149 Cong. Rec. H2522, H2524 (Apr. 1, 2003) (Rep.
Isakson) (the Act ensures that our troops who “serve us in the
Middle East and in Iraq” and their families “are not harassed by
collectors and that their loan payments are deferred until they
return”); id. at H2525 (Rep. Burns) (“The HEROES bill would
excuse military personnel from their Federal student loan obligations while they are on active duty in service to the United
States.”); id. at H2524 (Rep. Ryan) (the Act gives the Secretary
“the opportunity to forbear a loan as our servicemen and servicewomen are activated” so that they will not have “to pay on their
student loans for the time that they are active”).
44
trillion-dollar, one-time spending program is different
from mine-run agency actions that may “implicat[e]
billions of dollars.” Br.47. And contrary to the Government’s assertion, legislation that Congress recently
rejected wasn’t “meaningfully differe[nt]” from the
Program. Br.52; see, e.g., S. 2235, 116th Cong. §101
(2019) (canceling up to $50,000 of student-loan debt
for those who make under $100,000); H.R. 2034, 117th
Cong. §2 (2021) (canceling the outstanding loan balances for borrowers making under $100,000 individually or $200,000 if married filing jointly). Nor did Congress “anticipat[e]” the Program by passing the American Rescue Plan Act, Br.52-53, one provision of which
exempts all debt discharges from taxation and never
references the HEROES Act, Pub. L. 117-2, §9675(a),
135 Stat. 4, 185-86 (Mar. 11, 2021); see also NFIB, 142
S.Ct. at 666 (ARPA “said nothing about OSHA’s [subsequent] vaccine mandate”).
Second, Congress “‘could not have intended to
delegate’ such a sweeping and consequential authority ‘in so cryptic a fashion.’” West Virginia, 142 S.Ct.
at 2608. If Congress wanted to authorize the Secretary to cancel student-loan debts, it would have said
so. Congress has explicitly authorized the Secretary to
cancel student-loan debt in numerous other circumstances. See, e.g., 20 U.S.C. §1087ee(a)(2) (“[l]oans
shall be canceled” for certain individuals engaging in
public service); §1087j(a)-(b) (the Secretary shall
“carry out a program of canceling the obligation [of
certain teachers] to repay a qualified loan amount”);
see also §1078-11(a)(1); §1078-12; §1087e(m)(1). But
the HEROES Act never “mention[s] loan forgiveness.”
45
App.291. Congress never would have given the Secretary this enormous power through an “implicit delegation.” Gonzales, 546 U.S. at 267.
Third, the Program is “‘unprecedented.’” West
Virginia, 142 S.Ct. at 2608 (quoting Ala. Realtors, 141
S.Ct. at 2489). Despite the September 11 attacks and
multiple wars, the Department has “‘never relied on
its [HEROES-Act] authority’” to cancel a single student’s debts. Id. at 2608-09. Indeed, the Department’s
previous view was that it had no such authority.
App.265. The Government also can’t identify any
other agency action of similar size, scale, and importance that was lawfully created through the stroke
of a pen, without notice-and-comment or any other
similar process. Nor does the Government provide any
reason why Congress—which just three years before
the HEROES Act had strengthened the negotiatedrulemaking process due to “frustration … over the
way in which the Secretary [was] formulat[ing] and
issu[ing] regulations,” H.R. Rep. 105-481, at 145 (Apr.
17, 1998)—would have wanted the Secretary to create
a half-trillion-dollar program affecting millions of individuals with no public involvement. This “‘lack of
historical precedent’” is a “‘telling indication’” that the
agency has overstepped. NFIB, 142 S.Ct. at 666.
The Government points to its use of the HEROES
Act “since March 2020 … to afford relief to all borrowers” in response to COVID-19 as evidence that its actions are legal now. Br.51-52. But no court has ever
upheld these actions, and the Administration’s actions
in response to COVID-19 have repeatedly been found
unlawful when challenged. See, e.g., Ala. Realtors, 141
46
S.Ct. at 2488-90; NFIB, 142 S.Ct. at 665-66. Regardless, these repayment freezes are meaningfully different from the Program. Payments and interest accrual
were merely “pause[d]” and “suspend[ed],” not lost forever. Br.8. Some of these pauses were directly ordered
by Congress. See Pub. L. 116-136, §3513, 134 Stat.
281, 404-05 (Mar. 27, 2020) (providing “temporary relief for federal student loan borrowers” through September 30, 2020). And were it not vacated, the Program here would have been implemented long after
the President declared the pandemic “‘over.’” App.29293. These recent actions thus provide little justification for the Program.
Fourth, the Government’s theory has “no limit.”
Ala. Realtors, 141 S.Ct. at 2489. Under the Government’s theory, the Secretary could eliminate all student-loan debts—more than $1.6 trillion—because
every borrower in America is an “affected individual”
and total cancellation would “‘ensure’” that they aren’t
“‘placed in a worse position’” because of the pandemic.
Br.35 (quoting 20 U.S.C. §1098bb(a)(2)); see App.242
(noting that “discharging the entire loan amount
would permanently avoid [the] harm” of delinquency
and default). And because a “national emergency” is
simply “‘a national emergency declared by the President,’” Br.34-35 (quoting 20 U.S.C. §1098ee(4)), nothing would stop the next Administration from identifying other “emergencies” (say, income inequality, climate change, the war on drugs, or even the studentdebt crisis) to justify any amount of debt cancellation.
Congress never would have given the Secretary such
47
broad authority “‘in so cryptic a fashion,’” West Virginia, 142 S.Ct, at 2408, and without requiring ample
public participation and procedural safeguards.
The Government’s final argument is that the major-questions doctrine should never apply to agency
actions related to “government benefit program[s].”
Br.48-49. But the doctrine stems from “separation of
powers principles and a practical understanding of
legislative intent.” West Virginia, 142 S.Ct. at 2609. It
reflects the “presum[ption] that ‘Congress intends to
make major policy decisions itself.’” Id. Agency actions
concerning “government benefits” can readily implicate these same concerns. Consider, for example, an
agency’s attempt to privatize or abolish social security—the notorious “third rail” of politics. The Government provides no reason why trillions of dollars of government spending should be uniquely exempt from
the major-questions doctrine. The Constitution, which
gives Congress the power of the purse, suggests otherwise. E.g., Art. I, §9, cl. 7 (“No Money shall be drawn
from the Treasury, but in Consequence of Appropriations made by Law.”).
Because the major-questions doctrine applies, the
Government must show “‘clear congressional authorization’” for the Program. West Virginia, 142 S.Ct. at
2609; e.g., NFIB, 142 S.Ct. at 665-66. It cannot. The
HEROES Act never mentions loan forgiveness. The
Department has never used the Act to cancel debts,
despite ample opportunity and incentive. And nothing
in the Act’s text or history indicates that Congress authorized the Secretary to cancel student-loan debts,
let alone for tens of millions of borrowers at a cost of
48
$400 billion. Even if the Government could conjure a
“plausible textual basis” for its actions, West Virginia,
142 S.Ct. at 2609, it simply “strains credulity to believe that this statute grants the [Secretary] the
sweeping authority that [he] asserts,” Ala. Realtors,
141 S.Ct. at 2486.
Even without the major-questions doctrine, the
HEROES Act does not give the Secretary authority to
enact the Program. The Government argues that the
Secretary can cancel student loans through his power
to “waive” or “modify” provisions concerning student
loans. Br.36, 38 (citing 20 U.S.C. §1098bb(a)(1)). Not
so.
To begin, the Secretary’s waiver authority is irrelevant because the Secretary never purported to
“waive” any provision to create the Program. See 87
Fed. Reg. at 61514 (“Pursuant to the HEROES Act, …
the Secretary modifies the provisions of ….”). The Secretary has never explained what the Program
“waives.” Indeed, the Secretary couldn’t have effectuated the Program through a “waiver” because none of
the referenced provisions impose any obligation on
borrowers to repay their loans. Id. The Secretary instead purported to create the Program through five
“modifications” of existing statutory and regulatory
provisions. Id. (citing 20 U.S.C. §1087; 20 U.S.C.
§1087dd(g); 34 C.F.R. Part 674, Subpart D; 34 C.F.R.
§§682.402, 685.212).
But the Secretary cannot “modify” provisions to
create the Program either. Br.38. As Congress knew,
the word “modify” means “to change moderately or in
49
minor fashion.” MCI, 512 U.S. at 225. The Secretary
can’t use a “modification” to make “basic and fundamental changes in the [statutory and regulatory]
scheme.” Id.
Yet basic and fundamental changes are precisely
what the Program purports to do. Consider 20 U.S.C.
§1087. That statutory provision provides, in part:
If a student borrower who has received a
[FFEL] loan … dies or becomes permanently
and totally disabled … the Secretary shall discharge the borrower’s liability on the loan by
repaying the amount owed on the loan.
20 U.S.C. §1087(a)(1). The Secretary has now “modified” this provision as follows:
If a student borrower who has received a
[FFEL] loan that is “held by the Department or subject to collection by a guaranty agency” and was not consolidated
after September 29, 2022 … dies or becomes
permanently and totally disabled the Secretary shall discharge the borrower’s liability on
the loan by repaying the amount owed on the
loan “up to a maximum of: (a) $20,000 for
borrowers who received a Pell Grant and
had an Adjusted Gross Income (AGI) below $125,000 for an individual taxpayer
or below $250,000 for borrowers filing
jointly or as a Head of Household, or as a
qualifying widow(er) in either the 2020
or 2021 Federal tax year; or (b) $10,000
50
for borrowers who did not receive a Pell
Grant and had an AGI on a Federal tax
return below $125,000 if filed as an individual or below $250,000 if filed as a joint
return or as a Head of Household, or as a
qualifying widow(er) in either the 2020
or 2021 Federal tax year,” as long as the
borrower “appl[ies] by the deadline established by the Secretary.”
87 Fed. Reg. at 61514. This change is not “moderate”
or “minor.” MCI, 512 U.S. at 225. It is “the introduction of a whole new regime” of loan forgiveness. Id. at
234. The other regulatory and statutory provisions
that the Secretary purports to “modify” have the same
problem. See 87 Fed. Reg. at 61514. Indeed, the Secretary has purported to modify an entire subpart of
the Department’s regulations, one that contains 14
separate provisions and spans 19 pages of the federal
code. See id. (“modif[ying]” 34 C.F.R. Part 674, subpart D (34 C.F.R. §§674.51-64); see also id. (“modif[ying]” 34 C.F.R. §682.402 (containing 19 subsections
and spanning 32 pages)).
If Congress wanted to authorize the Secretary to
cancel student-loan debts, it would have said so, just
like it has in other circumstances. This Court
shouldn’t “read [debt cancellation] into” the HEROES
Act “when it is clear that Congress knew how to [authorize it] when it wanted to.” Sosa v. Alvarez-Machain, 542 U.S. 692, 711 n.9 (2004); see Scalia & Garner,
Reading Law 182 (2012) (noting the “‘familiar easy-tosay-so-if-that-is-what-was-meant rule of statutory interpretation’”). And although the Act “does not list”
51
other “forms of relief” like forbearance and deferment
either, Br.39-40, debt cancellation is a different order
of magnitude. It is “highly unlikely that Congress”
would have authorized loan cancellation “through
such a subtle device as permission to ‘modify.’” MCI
Tel., 512 U.S. 231; see Whitman v. Am. Trucking
Ass’ns, Inc., 531 U.S. 457, 468 (2001) (Congress
doesn’t “hide elephants in mouseholes”).
The Government further ignores a key limitation
in the HEROES Act: the Secretary can issue waivers
and modifications only to ensure that borrowers “are
not placed in a worse position financially in relation to
[their] financial assistance.” 20 U.S.C. §1098bb
(a)(2)(A) (emphasis added). In other words, the Secretary can preserve the status quo while individuals
deal with temporary challenges like a “military operation” or “national emergency.” §1098bb(a)(1). Yet the
Program places every borrower in a far better position
by canceling individuals’ underlying principal. Indeed, 18 million individuals would “have their federal
student loans discharged in their entirety,” App.306,
and the remaining borrowers would have their “median debt fal[l] from $29,400 to $13,600,” App.243.
This forgiveness far exceeds the Secretary’s authority.
Even if the HEROES Act allowed some form of
debt cancellation, the Program’s scope is too broad
and untailored to fit within the statute. To begin, the
Secretary can act only to prevent harm that would occur “because of” the individual’s status as an affected
individual. 20 U.S.C. §1098bb(a)(2)(A). While the Government contends that the Program targets only
52
“lower-income borrowers” who are at a high risk of delinquency and default “because of” the pandemic,
Br.35-36, that isn’t true. The Program covers everyone
except “the top 5% of incom[e]” earners—individuals
making up to $125,000 individually or $250,000
jointly. Fact Sheet, The White House (Aug. 24, 2022),
perma.cc/4AWB-5E6W. Even if some of the bottom
95% are at risk of default or delinquency “because of”
the pandemic, the Program isn’t remotely tailored to
those borrowers. For the same reasons, the Government cannot show that the Program is even arguably
“necessary” to ensure that the 40 million individuals
receiving debt forgiveness under the Program don’t
default or become delinquent. 20 U.S.C. §1098bb
(a)(2)(A). The Secretary’s “indiscriminate approach
fails” to target borrowers who truly are at risk of default and delinquency because of the pandemic. NFIB,
142 S.Ct. at 666.
The Secretary’s dearth of evidence justifying the
Program only highlights why Congress required him
to use the ordinary rulemaking process. Br.42-43. The
Department’s untested, lightly sourced, 13-page memorandum is the thinnest of reeds to justify a half-trillion-dollar program. App.232-55. If the Secretary had
gone through the proper rulemaking process, he likely
would have received tens of thousands of comments
and the preamble to the rule would be hundreds of
pages long. Yet the Secretary approved it in a twopage order, apparently spending half a morning reviewing the evidence. See App.232, 259 (approving the
Program the same day he received the memo, August
24, at 9:25am).
53
There are numerous reasons to “dispute [the Department’s] determinations.” Br.43. Its primary evidence is a survey of student-loan borrowers. App.23536 & n.4. But that survey found that most borrowers
do not need forgiveness to avoid delinquency and default, and those who do need forgiveness need it regardless of the pandemic. Akana, Expectations of Student Loan Repayment, Forbearance, and Cancellation:
Insights from Recent Survey Data 2-3 (May 2022),
perma.cc/245V-UGS7. Most borrowers who are expected to struggle with payments are “chronically
struggling and neither made payments in 2019 nor expect to make payments” when forbearance ends. Id. at
7, 11 (emphasis in original).
Other facts similarly disprove the Secretary’s conclusion that the Program is needed “because of” the
pandemic. When the Secretary announced the program in August, the unemployment rate was at 3.5%,
“match[ing] the lowest it’s been in more than 50
years.” Statement by President Biden on the July Jobs
Report, White House (Aug. 5, 2022), perma.cc/9MH7QTPM. Nearly 80 percent of all student-loan borrowers “saw increases to their credit scores during the
pandemic.” Mangrum, Three Key Facts from the Center for Microeconomic Data’s 2022 Student Loan Update, Fed. Rsrv. Bank of N.Y. (Aug. 9, 2022), perma.cc/
9EV3-PS4X. The Secretary had already paused loan
payments and suspended interest accrual for nearly
two and a half years, Br.8, and Congress had approved
roughly $5 trillion in spending to help those affected
by the pandemic, see Parlapiano, Where $5 Trillion in
Pandemic Stimulus Money Went, N.Y. Times (Mar.
11, 2022), perma.cc/FXP6-V3BS. Families “across the
54
income spectrum” had “seen their checking account
balances increase compared to pre-pandemic, with the
largest gains among the lowest-income families.” The
Biden-Harris Economic Blueprint 29, White House
(Sept. 2022), perma.cc/3W44-XFRG. And in September the President declared that the pandemic was
“‘over.’” App.292-93. Given these circumstances, the
Program was not possibly “necessary” to ensure that
all borrowers except those in the top 5% of incomes
don’t default or become delinquent on payments “because of” the pandemic.
The Program also improperly extends loan forgiveness to borrowers who are not “affected individuals.” 20 U.S.C. §1098bb(a)(2)(A). Because the Program
is not limited to those serving on “active duty” or in
the “National Guard,” §1098ee(2)(A)-(B), the Government points to §1098ee(2)(C) and (D) of the HEROES
Act. But the Program is not limited to those who “reside[d] or [were] employed in an area that is declared
a disaster area,” §1098ee(2)(C), because the nine million individuals who were living abroad during the
pandemic are eligible for debt forgiveness too, see Consular Affairs by the Numbers, U.S. Dep’t of State (Jan.
2020), perma.cc/L8PN-BCX4. And there is no evidence that those individuals “suffered direct economic
hardship as a direct result of” the pandemic. 20 U.S.C.
§1098ee(2)(D) (emphasis added).
Recognizing that the Secretary “err[ed] on the side
of overinclusion,” Br.43-44, the Government argues
that the Program’s expansive scope is permissible because the Secretary can “issue relief to classes of borrowers rather than on a ‘case-by-case basis.’” Br.36
55
(quoting 20 U.S.C. §1098bb(b)(3)), and because the
phrases “‘deems necessary’” and “‘necessary to ensure’” imply substantial “‘deference’” to the Secretary,
Br.36-37, 43 (quoting 20 U.S.C. §1098bb(a)). But these
provisions aren’t “‘a roving license to ignore the statutory text.’” Am. Elec. Power v. Connecticut, 564 U.S.
410, 427 (2011); accord Ala. Realtors, 141 S.Ct. at
2489 (agency can’t assert a “breathtaking amount of
authority” simply by “deem[ing] a measure ‘necessary’”). The waivers and modifications still must be
“authorized” by the Act. 20 U.S.C. §1098bb(a)(1)-(2).
Nor are the Program’s mismatches minor imprecisions that inevitably occur when providing “categorical relief.” Br.7. They are the kind of gross over-inclusiveness that show that the agency made no serious
attempt to “exercise discretion within [the Act’s] defined statutory limits.” Am. Elec. Power, 564 U.S. at
427.
CONCLUSION
This Court should affirm the judgment below.
56
J. Michael Connolly
Counsel of Record
Cameron T. Norris
Gilbert C. Dickey*
James F. Hasson
Steven C. Begakis
CONSOVOY MCCARTHY PLLC
1600 Wilson Blvd., Ste. 700
Arlington, VA 22209
(703) 243-9423
mike@consovoymccarthy.com
*Admitted in AL, DC, NC, and
WV. VA bar application pending.
January 27, 2023
Counsel for Respondents
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.