Amicus Curiae Brief — Department of Education, et al., Petitioners v. Myra Brown, et al.
Supreme Court briefFeb 3, 2023
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No. 22-535
_________________________________________________
In the Supreme Court of the 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 of Amici Curiae States of Utah, Ohio, and
15 Other States in
Support of Respondents
____________________________________________________________________________________
DAVE YOST
Ohio Attorney General
BENJAMIN M. FLOWERS
Ohio Solicitor General
SYLVIA MAY MAILMAN
Deputy Solicitor General
30 E. Broad St., 17th Fl.
Columbus, Ohio 43215
Telephone: (614) 466-8980
Email:
benjamin.flowers@ohioago.gov
SEAN D. REYES
Utah Attorney General
MELISSA HOLYOAK
Utah Solicitor General
Counsel of Record
350 N. State Street, Suite 230
P.O. Box 142320
Salt Lake City, UT 84114
Telephone: (801) 538-9600
Email:
melissaholyoak@agutah.gov
Counsel for Amici Curiae
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .......................................ii
INTEREST OF AMICI CURIAE ................................ 1
SUMMARY OF ARGUMENT .................................... 1
ARGUMENT ............................................................... 4
I. The HEROES Act of 2003 permits the
Secretary of Education to waive or modify
student loan requirements in limited
circumstances. .................................................. 6
II. The HEROES Act gave the Secretary no
authority to implement the President’s
student-loan-forgiveness program. .................. 9
A. The loan-forgiveness program is illegal
unless it is clearly authorized by
statute. ........................................................ 9
B. The HEROES Act does not authorize,
clearly or otherwise, the Secretary’s
plan to forgive student debt en masse. ..... 12
CONCLUSION.......................................................... 22
ADDITIONAL COUNSEL ........................................ 24
ii
TABLE OF AUTHORITIES
Federal Cases
Ala. Ass’n of Realtors v. Dep’t of Health and
Human Servs.,
141 S.Ct. 2485 (2021) ............................................ 10
Arizona v. Mayorkas,
143 S.Ct. 478 (2022) .............................................. 14
Bond v. United States,
572 U.S. 844 (2014) ............................................... 14
BST Holdings, L.L.C. v. OSHA,
17 F.4th 604 (5th Cir. 2021) ................................... 6
Dep’t of Commerce v. New York,
139 S.Ct. 2551 (2019) .............................................. 5
Does 1-3 v. Mills,
142 S.Ct. 17 (2021) ................................................ 14
MCI Telecomms. Corp. v. Am. Tel. & Tel. Co.,
512 U.S. 218 (1994) ........................................... 3, 18
Morrison v. Olson,
487 U.S. 654 (1988) ................................................. 4
NFIB v. OSHA,
142 S.Ct. 661 (2022) ................................ 4, 9, 10, 11
Third Nat’l Bank in Nashville v. Impac Ltd.,
432 U.S. 312 (1977) ............................................... 13
Utility Air Regul. Grp. v. EPA,
573 U.S. 302 (2014) ............................................... 10
West Virginia v. EPA,
142 S.Ct. 2587 (2022) ...................................... 10, 11
Whitman v. Am. Trucking Assn’s,
531 U.S. 457 (2001) ................................................. 9
Federal Statutes
20 U.S.C. § 1078-10..................................................... 8
20 U.S.C. § 1087 .............................................. 3, 17, 18
20 U.S.C. § 1087(a) ................................................... 19
iii
20 U.S.C. § 1087(b) ................................................... 19
20 U.S.C. § 1087(c)(1) ............................................... 19
20 U.S.C. § 1087(d) ................................................... 19
20 U.S.C. § 1087dd(g) ..................................... 3, 17, 19
20 U.S.C. § 1087vv(a)(1)(A) ...................................... 18
20 U.S.C. § 1098bb(a)(1) ............................... 2, 3, 7, 17
20 U.S.C. § 1098bb(a)(2) ............................................. 7
20 U.S.C. § 1098bb(a)(2)(A) .................... 2, 3, 8, 12, 15
20 U.S.C. § 1098bb(a)(2)(B) ........................................ 8
20 U.S.C. § 1098bb(a)(2)(C) ........................................ 8
20 U.S.C. § 1098bb(a)(2)(D) .................................... 2, 8
20 U.S.C. § 1098ee(2) ........................................ 5, 7, 13
20 U.S.C. § 1098ee(2)(C) ....................................... 2, 13
20 U.S.C. § 1098ee(2)(D)....................................... 2, 15
Higher Education Relief Opportunities for
Students Act of 2003, Pub. Law No. 108-76,
117 Stat. 904........................................................ 1, 6
Federal Regulations
34 C.F.R. § 674 ...................................................... 3, 18
34 C.F.R. § 674.53(d) ................................................ 20
34 C.F.R. § 682.402 ......................................... 3, 18, 19
34 C.F.R. § 685.212 ......................................... 3, 18, 21
Continuation of the National Emergency
Concerning the Coronavirus Disease 2019
(COVID-19) Pandemic, 87 Fed. Reg. 10289
(Feb. 23, 2022) ....................................................... 15
Federal Student Aid Programs (Federal Perkins
Loan Program, Federal Family Education Loan
Program, and William D. Ford Federal Direct
Loan Program),
87 Fed. Reg. 61512-01 (Oct. 12, 2022) .... 3, 9, 15, 18
Federal Student Aid Programs,
68 Fed. Reg. 69312-01 (Dec. 12, 2003) 17, 18, 20, 21
iv
Federal Student Aid Programs,
77 Fed. Reg. 59311-01 (Sept. 27, 2012) ................ 21
Other Authorities
H.R. 2034, 117th Cong. §2 (2021)............................. 11
S. 2235, 116th Cong. §101(2019) .............................. 11
Secondary Sources
Cong. Budg. Off., Costs of Suspending Student
Loan Payments and Canceling Debt (Sept. 26,
2022), https://bit.ly/3SpZk6g ................................... 9
Ctrs. for Medicare & Medicaid Servs., Ongoing
emergencies & disasters (last updated Oct. 6,
2022), https://perma.cc/RP7N-X8EJ ..................... 14
FACT SHEET: President Biden Announces
Student Loan Relief for Borrowers Who Need It
Most, The White House (Aug. 24, 2002),
https://perma.cc/Y93P-VDB2 .................................. 5
Jed Shugerman, Biden’s Student-Debt Rescue
Plan Is a Legal Mess, The Atlantic (Sept. 4,
2022), https://perma.cc/8JGM-T4AT ...................... 5
Penn. Wharton Univ. of Pa., The Biden Student
Loan Forgiveness Plan: Budgetary Costs and
Distributional Impact (Aug. 26, 2022),
http://bit.ly/3X0C6Vy .............................................. 9
Remarks by President Biden Announcing Student
Loan Debt Relief Plan, The White House (Aug.
25, 2022), https://perma.cc/8FWE-SKT9 ................ 4
Remarks by President Biden on Strengthening
American Leadership on Clean Cars and
Trucks, The White House (Aug. 5, 2021),
https://perma.cc/87WU-UUNX ............................... 6
Scalia & Garner, Reading Law §31, p.195 (2012) ... 14
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INTEREST OF AMICI CURIAE
Amici curiae, the States of Utah, Ohio, Alabama,
Alaska, Florida, Georgia, Idaho, Indiana, Louisiana,
Mississippi, Montana, New Hampshire, Oklahoma,
Tennessee, Texas, West Virginia, and Wyoming, submit this brief in support of Respondents Myra Brown
and Alexander Taylor. The political branches have repeatedly tried, and failed, to pass legislation canceling
or reducing student-loan debt. The Executive Branch
sidestepped these failures by claiming that it has long
had the power to cancel debt under the HEROES Act
of 2003—post-September-11 legislation providing
debt relief for the brave men and women fighting the
war on terror. See Pub. Law No. 108-76, 117 Stat. 904.
The Secretary of Education’s mass loan cancellation—
$400 billion of the $1.6 trillion outstanding federal
student-loan debt—is among the most egregious examples of unauthorized executive action. Its impact
reaches all Americans, not least because the Secretary’s ultra vires maneuver adds astronomical costs to
the federal deficit. Further, Amici States have compelling interests in vindicating this grave violation of the
Constitution’s separation of powers.
SUMMARY OF ARGUMENT
The Secretary’s debt-forgiveness plan—which purports to forgive hundreds of billions of dollars in federally held student debt—is illegal. In arguing otherwise, the Secretary insists the HEROES Act authorizes his giveaway. That is wrong.
Begin with the text. The HEROES Act empowers
the Secretary, in specifically defined circumstances, to
“waive or modify any statutory or regulatory provision
applicable to the student financial assistance programs … as the Secretary deems necessary in
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connection with a war or other military operation or
national emergency.” 20 U.S.C. § 1098bb(a)(1). Relevant here, the Secretary may issue waivers and modifications to protect “affected individuals,” including
those who live in a declared disaster area or who “suffered direct economic hardship as a direct result of a
war or other military operation or national emergency.” § 1098ee(2)(C)–(D). The Secretary can issue
waivers and modifications to “ensure” that “affected
individuals are not placed in a worse position financially in relation to that financial assistance because
of
their
status
as
affected
individuals.”
§ 1098bb(a)(2)(A).
This language cannot be stretched to permit the
Secretary’s loan-forgiveness program. This follows for
at least three reasons.
First, the plan unlawfully confers benefits on individuals who are not “affected individuals.” The Secretary’s contrary claim rests on the fact that, remarkably, all of America remains a declared “disaster area”
because of COVID-19. § 1098ee(2)(C). That might suffice to make “affected individuals” out of Americans
living domestically. But the program also applies to
Americans living abroad, none of whom live in a declared disaster zone. The Secretary claims that such
individuals are “affected individuals” because they
“suffered direct economic hardship as a direct result
of a war or other military operation or national emergency”—the
emergency
being
COVID-19.
§ 1098bb(a)(2)(D). But the Secretary does not even attempt to explain how global economic trends qualify
as “direct” hardship to benefitted borrowers. Moreover, it is doubtful a pandemic qualifies as a “national
emergency” in the relevant sense—the statute seems
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to envision emergencies that are like wars and military operations, which pandemics are not.
Second, the Secretary can issue modifications and
waivers only to “ensure” that “affected individuals are
not placed in a worse position financially in relation to
that financial assistance because of their status as affected individuals.” § 1098bb(a)(2)(A) (emphasis
added). The plan, however, goes far beyond that. Rather than ensuring that borrowers are not made worse
off as a result of the pandemic, the plan aims to make
borrowers affirmatively better off than they were prepandemic. Further, instead of ensuring that borrowers are made no worse off “because of” the pandemic,
it ensures that borrowers are made better off without
regard to the pandemic’s effects—a borrower struggling because he performed poorly in college despite
majoring in an in-demand field is treated just the
same as an individual struggling because the pandemic harmed the economy in his field of study.
Finally, and most significant of all, the Secretary’s
plan does not identify “any statutory or regulatory
provision” that the plan will “waive or modify.”
§ 1098bb(a)(1). True, the plan rattles off a number of
provisions it purports to waive or modify. In particular, the plan cites 20 U.S.C. § 1087; 20 U.S.C.
§ 1087dd(g); 34 C.F.R. part 674, subpart D; and 34
C.F.R. §§ 682.402 and 685.212. See Federal Student
Aid Programs, 87 Fed. Reg. 61512-01, 61514 (Oct. 12,
2022). But none of those provisions imposes any requirements that the plan can fairly be described as
waiving or modifying. Each permits loan discharge or
cancellation in narrow circumstances. The plan does
not “waive” any of these requirements. It does not
“modify” them either. To modify means “to change
moderately or in minor fashion.” MCI Telecomms.
4
Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 225 (1994).
To say that provisions permitting discharge in narrow
circumstances permit class-wide discharge in entirely
unrelated circumstances amounts to creating new
provisions, not modifying preexisting ones.
In sum, the HEROES Act gives the Secretary no
power to adopt the plan in question. Certainly it does
not do so clearly, as it must before the Secretary can
claim the power to adopt a program of such “vast economic and political significance.” NFIB v. OSHA, 142
S.Ct. 661, 665 (2022) (per curiam) (citation omitted).
ARGUMENT
“If to describe this case is not to decide it, the concept of a government of separate and coordinate powers no longer has meaning.” Morrison v. Olson, 487
U.S. 654, 703 (1988) (Scalia, J., dissenting). The President is attempting one of the largest wealth transfers
in American history. More precisely, he has proposed
to forgive hundreds of billions of dollars in student
loans. Remarks by President Biden Announcing Student Loan Debt Relief Plan, The White House (Aug.
25, 2022), https://perma.cc/8FWE-SKT9. But no law
permits the President to do this. And the President
has no inherent constitutional authority to forgive
student debt. Accordingly, the loan-forgiveness program is illegal, and blatantly so.
Any effort to justify the program as an exercise of
the Secretary of Education’s authority under the HEROES Act of 2003 is unavailing. Passed after the September 11 attacks, the Act authorizes the Secretary to
modify or waive student loan requirements for individuals in military service. It gives the Secretary similar authority with respect to those suffering economic
hardship as a direct result of war, a military
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operation, or a national emergency. See 20 U.S.C.
§ 1098ee(2). The government claims that the COVID19 pandemic is a national emergency that justifies the
loan-forgiveness program. But if Congress wanted the
HEROES Act to empower the Secretary to cancel hundreds of billions of dollars in student-loan debt, it
needed to do so clearly. It failed to do so; the HEROES
Act clearly does not authorize the Secretary to forgive
hundreds of billions of dollars in student debt based
on a pandemic that is, in every relevant sense, over.
Indeed, the government’s main argument is pretextual: it insists the cancellation responds to pandemic-related financial risk. Yet the President touts
the loan-forgiveness program as fulfillment of a “campaign commitment”—a commitment motivated by the
belief that “the cost of borrowing for college” imposes
“a lifelong burden that deprives” borrowers of the
chance to build “a middle-class life.” FACT SHEET:
President Biden Announces Student Loan Relief for
Borrowers Who Need It Most, The White House (Aug.
24, 2022), https://perma.cc/Y93P-VDB2. That commitment has no plausible connection to the COVID-19
pandemic. The Secretary’s lawyers know that. Sympathetic legal scholars know that. See, e.g., Jed
Shugerman, Biden’s Student-Debt Rescue Plan Is a
Legal Mess, The Atlantic (Sept. 4, 2022),
https://perma.cc/8JGM-T4AT. And, most important of
all, the American people know that. This Court is “not
required to exhibit a naiveté from which ordinary citizens are free.” Dep’t of Commerce v. New York, 139
S.Ct. 2551, 2575 (2019) (citations omitted).
The program is part and parcel of the current Administration’s modus operandi: invoking far-fetched
legal arguments to launder abuses of executive authority, all in hopes that the courts will shrink from
6
their role in checking executive abuse. See, e.g., Remarks by President Biden on Strengthening American
Leadership on Clean Cars and Trucks, The White
House (Aug. 5, 2021), https://perma.cc/87WU-UUNX
(remarking that the eviction moratorium might not
survive legal review after the Supreme Court’s decision but the CDC could at least “keep [it] going” until
overturned); BST Holdings, L.L.C. v. OSHA, 17 F.4th
604, 612 n.13 (5th Cir. 2021) (citing White House
Chief of Staff Ron Klain’s retweet of claim that “OSHA
doing this vaxx mandate as an emergency workplace
safety rule is the ultimate work-around for the Federal
govt to require vaccinations”). The Court must not go
along.
I.
The HEROES Act of 2003 permits the Secretary of Education to waive or modify student
loan requirements in limited circumstances.
On September 11, 2001, terrorists attacked our
country. That day, thousands watched helplessly as
their places of work collapsed with their colleagues
trapped inside. Thousands more were moved to enlist
in the armed forces. Some of these individuals had
school loans—loans for which payments would be due
during a military deployment or unemployment
brought about by the September 11 attack.
Congress responded with the Higher Education
Relief Opportunities for Students (HEROES) Act of
2003, Pub. Law No. 108-76, 117 Stat. 904. President
Bush signed it into law. The Act permits the Secretary
of Education to:
waive or modify any statutory or regulatory
provision applicable to the student financial assistance programs under title IV of the [Higher
Education Act of 1965] as the Secretary deems
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necessary in connection with a war or other military operation or national emergency to provide the waivers or modifications authorized.
20 U.S.C. § 1098bb(a)(1) (emphasis added). The authorized waivers or modifications are for “affected individuals.” Id. § 1098bb(a)(2). An “affected individual”
is “an individual who”:
(A) is serving on active duty during a war or
other military operation or national emergency;
(B) is performing qualifying National Guard
duty during a war or other military operation
or national emergency;
(C) resides or is employed in an area that is declared a disaster area by any Federal, State, or
local official in connection with a national emergency; or
(D) suffered direct economic hardship as a direct result of a war or other military operation
or national emergency, as determined by the
Secretary.
20 U.S.C. § 1098ee(2); see id. § 1098bb(a)(2).
Breaking this down, the Secretary may “waive or
modify” certain provisions in the Higher Education
Act. Id. § 1098bb(a)(1). When may he do so? Only
when “necessary in connection with a war or other
military operation or other national emergency.” Id.
For whom may the provisions be waived or modified?
“Affected individuals,” which means individuals: serving in the military or the National Guard; living or
working in an area declared a “disaster area” in connection with a national emergency; or suffering “direct
economic hardship as a direct result of,” a war, military operation, or national emergency. And what
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provisions may be waived or modified? To that last
question, there are four answers.
First, the Secretary may waive or modify provisions as needed to keep affected individuals from being placed “in a worse position financially in relation
to” their student loans “because of their status as affected individuals.” 20 U.S.C. § 1098bb(a)(2)(A).
Second, the Secretary may waive or modify “administrative requirements placed on affected individuals” to the extent he can do so “without impairing the
integrity of the student financial assistance programs.” Id. § 1098bb(a)(2)(B).
Third, the Secretary may “modif[y]” (but not
“waive”) the calculation of “annual adjusted family income … to reflect more accurately the financial condition of” affected individuals. Id. § 1098bb(a)(2)(C).
Finally, the Secretary may “modif[y]” (but not
waive) “the calculation” of refunds to institutions “so
that no overpayment will be required to be returned
or repaid.” Id. § 1098bb(a)(2)(D).
The Act thus provides the Secretary of Education
with specific and limited waiver authority. Most
prominently, it is the authority to protect soldiers
from being disenrolled from school or financial-aid
programs while they are deployed, and to reduce the
administrative burden these individuals face when
they answer the call of duty. But notably, unlike specific provisions of the Higher Education Act outlining
public-service loan forgiveness, see, e.g., 20 U.S.C.
§ 1078-10 (teachers), nothing in the HEROES Act expressly authorizes any loan forgiveness.
9
II. The HEROES Act gave the Secretary no authority to implement the President’s student-loan-forgiveness program.
President Biden claims the HEROES Act
empowered the Secretary’s mass cancellation. On
October 12, 2022, the Secretary of Education
purported to issue a HEROES Act modification that
would “discharge the balance of a borrower’s eligible
loans” up to a certain amount. Federal Student Aid
Programs, 87 Fed. Reg. 61512-01, 61514 (Oct. 12,
2022) . Even after accounting for the administration’s
arbitrary restrictions—$10,000 to $20,000 of windfall
for couples with incomes up to $250,000—the
discharge will cost between $400 and $519 billion, a
large portion of the $1.6 trillion in student debt
currently owed. See Cong. Budg. Off., Costs of
Suspending Student Loan Payments and Canceling
Debt (Sept. 26, 2022), https://bit.ly/3SpZk6g; Penn.
Wharton Univ. of Pa., The Biden Student Loan
Forgiveness Plan: Budgetary Costs and Distributional
Impact (Aug. 26, 2022), http://bit.ly/3X0C6Vy.
The HEROES Act gives the Secretary no
authority to do this.
A. The loan-forgiveness program is illegal
unless it is clearly authorized by statute.
Congress does not “alter the fundamental details
of a regulatory scheme in vague terms or ancillary
provisions—it does not, one might say, hide elephants
in mouseholes.” Whitman v. Am. Trucking Assn’s, 531
U.S. 457, 468 (2001). Thus, Congress must speak
clearly if it intends for an agency to “exercise powers
of vast economic and political significance.” NFIB v.
OSHA, 142 S.Ct. 661, 665 (2022) (per curiam) (quoting
10
Ala. Ass’n of Realtors v. Dep’t of Health and Human
Servs., 141 S.Ct. 2485, 2489 (2021) (per curiam)).
The Supreme Court recently applied this principle
in rejecting OSHA’s argument that a seldom-used
provision in the Occupational Safety and Health Act
empowered the agency to impose a COVID-19
vaccination mandate on tens of millions of American
workers. The Court observed that the vaccine
mandate “qualifi[ed] as an exercise” of significant
political and economic authority. NFIB, 142 S.Ct. at
665. But the text of the relevant law did not “plainly
authorize[]” OSHA to wield such extravagant
authority. Id. What is more, OSHA had “never before
adopted a broad public health regulation of th[at]
kind.” Id. at 666. The Court concluded, based on the
“lack of historical precedent” and the absence of clear
textual authority for OSHA’s action, that federal law
could not be understood as empowering OSHA to
exercise such vast authority. Id. (internal quotation
marks omitted).
Even more recently, the Supreme Court rejected
the EPA’s attempt to restructure the American energy
market. West Virginia v. EPA, 142 S.Ct. 2587, 2610
(2022). The Court reiterated that it greets an agency’s
assertion of “‘extravagant statutory power over the
national economy’ with ‘skepticism.’” Id. at 2609
(quoting Utility Air Regul. Grp. v. EPA, 573 U.S. 302,
324 (2014)). Yet the EPA produced no “clear
congressional authorization” for its action. Id. at 2614.
Instead, the EPA sought to adopt a regulatory
program “that Congress had conspicuously and
repeatedly declined to enact itself.” Id. at 2610.
Similar reasoning applies here. The power to
unilaterally forgive hundreds of billions of dollars of
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loans—effectively, the power to take on hundreds of
billions of dollars in debt—is undoubtedly a power of
“vast economic and political significance.” NFIB, 142
S.Ct. at 665 (internal quotation marks omitted). The
Secretary has never before interpreted the Act to
confer loan-cancellation authority. And the Secretary
seeks to implement a loan-forgiveness program that
Congress has conspicuously and repeatedly declined
to enact. 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 balance on loans for
all borrowers under a certain income cap). The Court
presumes that “Congress intends to make major policy
decisions itself, not leave those decisions to agencies.”
West Virginia, 142 S.Ct. at 2609 (internal quotation
marks omitted). That presumption applies here.
The government argues that the major-questions
doctrine does not apply because the cancellation
“concerns the administration of a federal benefit
program and involves no assertion of regulatory
authority at all.” Pet. Br. 20. This Court has
recognized no such exception. The major-questions
doctrine looks to whether the asserted “highly
consequential power [is] beyond what Congress could
reasonably be understood to have granted.” West
Virginia, 142 S.Ct. at 2609. The question is not
whether that power imposes or lifts administrative
burdens, but whether exercise of that power has vast
economic and political significance. The doctrine rests
on the presumption that Congress, when it intends to
give an agency such vast power, does so clearly. That
presumption applies whenever an agency claims the
power to implement major social and economic policy
12
decisions, regardless of whether it acts by giving a
benefit or imposing regulatory burdens.
It follows from all this that the HEROES Act
cannot be understood to confer such authority unless
it does so clearly.
B. The HEROES Act does not authorize,
clearly or otherwise, the Secretary’s plan
to forgive student debt en masse.
The HEROES Act does not clearly empower the
Secretary to implement the loan-forgiveness program.
Instead, it unambiguously does not empower the Secretary to adopt this program.
1.
Many beneficiaries are not “affected individuals” eligible for relief under the HEROES Act.
As an initial matter, the plan is illegal because it
applies to people who are not “affected individuals.”
Relevant here, the Secretary can waive or modify
rules where necessary to “ensure” that “affected individuals are not placed in a worse position financially
in relation to that financial assistance because of their
status as affected individuals.” 20 U.S.C.
§ 1098bb(a)(2)(A) (emphasis added). The government
claims that this provision could permit the studentloan-forgiveness plan.
The government’s argument fails for a very simple
reason: whereas this provision allows the Secretary to
waive or modify certain provisions in their application
to “affected individuals,” the loan-forgiveness program confers benefits on a class that includes many
debtors who are not “affected individuals.”
Recall that the Act defines “affected individual” as
an individual (A) serving on active duty; (B)
13
performing qualifying National Guard duty; (C) residing in an area declared a “disaster area” in connection
with a national emergency; or (D) who suffered direct
economic hardship as a direct result of a war or other
military operation or national emergency. 20 U.S.C.
§ 1098ee(2). The program here forgives student debt
without regard to military status, meaning the beneficiaries are not “affected individuals” under subsections (A) and (B). Instead, the government argues that
under subsection (C), all borrowers living in the
United States are “affected individuals” because President Trump’s 2020 COVID-19 disaster declarations
remain in effect. See Pet. Br. 35.
To begin, subsection (C) applies only to people who
“reside[] or [are] employed in an area that is declared
a disaster area … in connection with a national emergency.” 20 U.S.C. § 1098ee(2)(C) (emphasis added).
And while the entire nation (remarkably) remains a
declared disaster zone because of COVID-19, it is
doubtful that the COVID-19 pandemic constitutes a
“national emergency” for purposes of the HEROES
Act. Under the associated-words canon, “words
grouped in a list should be given related meanings.”
Scalia & Garner, Reading Law §31, p.195 (2012)
(quoting Third Nat’l Bank in Nashville v. Impac Ltd.,
432 U.S. 312, 322 (1977)). Thus, when the phrase “national emergency” appears in the phrase “war or other
military operation or national emergency,” it should
be understood as referring only to the sort of national
emergencies similar in nature to a war or military operation—not (for example) to a pandemic that is over
in every relevant sense, or to the opioid crisis, which
has been a declared national emergency for five years
now. Ctrs. for Medicare & Medicaid Servs., Ongoing
emergencies & disasters (last updated Oct. 6, 2022),
14
https://perma.cc/RP7N-X8EJ. Although the HEROES
Act broadly defines “national emergency” as simply “a
national emergency declared by the President of the
United States,” 20 U.S.C. §1098ee(4), ordinary meaning can narrow the scope of a broadly defined term.
See, e.g., Bond v. United States, 572 U.S. 844, 860–61
(2014). As a matter of ordinary meaning, “national
emergency” in this context does not have “as expansive a scope as might at first appear.” Id. at 860.
More important, even assuming the COVID-19
pandemic at some point qualified as a “national emergency,” it does not qualify today, see Arizona v. Mayorkas, 143 S.Ct. 478, 479 (2022) (Gorsuch, J., dissenting), when American life is mostly indistinguishable
from what it looked like in pre-pandemic times. But
even though COVID-19 is now irrelevant to nearly all
Americans, the entire country remains in a state of
declared disaster. Continuation of the National Emergency Concerning the Coronavirus Disease 2019
(COVID-19) Pandemic, 87 Fed. Reg. 10289 (Feb. 23,
2022). This reflects the reality that government actors
are reluctant to terminate “indefinite states of emergency” that vest them with special authority. See Does
1-3 v. Mills, 142 S.Ct. 17, 21 (2021) (Gorsuch, J., dissenting). That is all the more reason to interpret narrowly the powers that “disaster” status confers.
But even subsection (C)’s broad and perhaps-interminable reach cannot save the program. That is because the program forgives the debts even of individuals who do not live or work in the United States or
its territories. The government attempts to evade this
flaw by claiming that those individuals living abroad
are “affected individuals” under subsection (D). To no
avail. Under subsection (D), affected individuals include those who “suffered direct economic hardship as
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a direct result of a war or other military operation or
national emergency.” 20 U.S.C. § 1098ee(2)(D) (emphasis added). The plan makes no attempt to ensure
these individuals satisfy this direct-hardship requirement.
Indeed, the Secretary does not, and cannot, point
to any class-wide hardship stemming from COVID-19.
Borrowers are entitled to loan forgiveness—they are
included within the covered class—as long as (1) they
owe debt held by the federal government and (2) they
fall below the income threshold needed to obtain forgiveness. See 87 Fed. Reg. at 61514. That the pandemic caused global economic harms is insufficient to
show these borrowers currently suffer hardship, much
less hardship that directly results from the pandemic.
2. The loan-forgiveness program goes beyond maintaining the pre-emergency
status quo.
The “affected individual” issue is the least of the
program’s problems. The bigger issue is that the program exceeds any authority the Secretary has to take
actions for the benefit of affected individuals.
The Act empowers the Secretary to waive requirements to ensure that affected individuals “are not
placed in a worse position financially in relation to
that financial assistance because of their status as affected individuals.” 20 U.S.C. § 1098bb(a)(2)(A) (emphasis added). The loan-forgiveness program fails because individuals receiving debt discharge are not being preserved in their pre-disaster status; rather than
placing the loans in forbearance, or even canceling the
accrual of interest, the loan-forgiveness program cancels student-loan debt altogether, thus placing borrowers in a more-favorable position relative to the
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status quo ante. In statutory terms, the loan-forgiveness program goes well beyond ensuring that affected individuals are not in a “worse position financially” as a result of their status as affected individuals.
Even worse, the program targets hardships that
borrowers have not endured as a result of their affected-individual status. That is fatal because the HEROES Act permits waivers and modifications only insofar as they relieve affected individuals of hardships
they sustained because they are “affected individuals.”
An example illustrates how the Department of Education has traditionally understood the required connection between hardship and affected-individual status.
Federal borrowers normally qualify for some amount
of loan cancellation “if they are employed full-time in
specified occupations, such as teaching, childcare, or
law enforcement.” 68 Fed. Reg. 69312-01, 69317 (Dec.
12, 2003). The Secretary, in 2003, waived “the requirements that apply to the various loan cancellations
that such periods of service be uninterrupted and/or
consecutive, if the reason for the interruption is related to the borrower’s status as an affected individual.” Id. Those requirements put an affected borrower
in a worse position in relation to his loans because, but
for the borrower’s affected-individual status, the borrower could have completed uninterrupted teaching or
law-enforcement service and could have qualified for
some relief. The waiver restored the borrowers to the
position they would otherwise have been in.
The loan-forgiveness program flunks this requirement: it grants forgiveness to people whose financial
situations are not strained because of their status as
affected individuals. That is in part because the Secretary has defined “affected individuals” to consist of
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every federal loan holder, rather than defining them
with reference to some specific, shared attribute (like
being active-duty military). An individual given multiple raises during the pandemic, an individual who
left a lucrative career voluntarily, and an individual
suffering financially due to picking the wrong major
or graduating at the bottom of his class, have not been
“placed” in a worse financial position because of
COVID-19 or any local so-called disaster. And yet they
all qualify for relief. Even though the HEROES Act
does not require an individualized assessment, the
Secretary has not plausibly shown that the class to
whom the program applies is, as a class, suffering
hardship because of COVID-19.
3. The loan-forgiveness program neither
waives nor modifies any provision in
the Higher Education Act.
Even if the Secretary could clear these many hurdles, one more remains. The HEROES Act empowers
the Secretary to give “waivers” and “modifications” of
certain loan-repayment requirements in the Higher
Education Act. 20 U.S.C. § 1098bb(a)(1) (emphasis
added). The Secretary claims to modify—not waive—
the provisions of: 20 U.S.C. § 1087; 20 U.S.C.
§ 1087dd(g); 34 C.F.R. part 674, subpart D; and 34
C.F.R. §§ 682.402 and 685.212. 87 Fed. Reg. at 61514.
The so-called modification “provide[s] that” the Department of Education will discharge $10,000 to
$20,000 in loans for individuals who meet certain income thresholds. Id.
The attempt to characterize this as a “modification” fails for two reasons.
a. First, to modify means “to change moderately
or in minor fashion.” MCI Telecomms. Corp. v. Am.
18
Tel. & Tel. Co., 512 U.S. 218, 225 (1994) (“modify” in
federal statute “has a connotation of increment or limitation”). For example, the Higher Education Act defines “total income” for purposes of needs-based student assistance by using figures from the “preceding
tax year.” 20 U.S.C. § 1087vv(a)(1)(A). The Secretary
modified that requirement in 2003, using the “award
year” instead of the “preceding tax year” so as “to reflect more accurately the financial condition of an affected individual and his or her family,” 68 Fed. Reg.
at 69313. That minor alteration qualifies as a modification.
Rather than making minor alterations of this sort,
the Secretary established an altogether new loan-forgiveness program. This regulatory invention does not
“change” the Higher Education Act’s operation in a
“moderate[]” or “minor fashion.” MCI, 512 U.S. at 225.
It constitutes a significant, and significantly costly,
act of invention.
b. Second, and relatedly, the establishment of the
loan-forgiveness program does not entail changing (or
even waiving the application of) any particular provision in the Higher Education Act. Indeed, none of the
provisions the Secretary claims to be modifying are
being modified in any way. This brief considers each
in turn.
20 U.S.C. § 1087 and 34 CFR § 685.402. The Secretary first claims to modify 20 U.S.C. § 1087, along
with its corresponding regulation, 34 C.F.R.
§ 682.402. The statute contains four subsections. Subsections (a) and (d) tell the Secretary what to do with
loans that a borrower cannot repay because of death
or disability. 20 U.S.C. § 1087(a), (d). Subsection (b)
addresses the payment of loans held by debtors who
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declare bankruptcy. Id. § 1087(b). And subsection (c)
provides for loan discharge where the student is “unable to complete the program in which such student is
enrolled due to the closure of the institution.” Id. §
1087(c)(1).
The loan-forgiveness program does not “waive” any
of these provisions. It does not “modify” any of them
either. The program, rather than repaying the loans
of a borrower who “dies” or becomes “disabled,” discharges an arbitrary amount for every borrower below
an income threshold. So rather than modifying these
provisions, the Secretary has created a new program
in which debt can be forgiven in circumstances unrelated to anything the statute addresses.
20 U.S.C. § 1087dd(g). Now consider 20 U.S.C.
§ 1087dd(g), the second statute whose requirements
the Secretary claims to have modified. This provision,
like 20 U.S.C. § 1087(c)(1), permits discharge where a
school closes down while the student is enrolled (and
requires the Secretary to seek repayment from the
school). Id. § 1087dd(g). And this provision, just like
§ 1087(c)(1), has nothing to do with the Secretary’s actions—the loan-forgiveness program neither waives
nor modifies it.
34 CFR part 674, subpart D. Subpart D of 34
C.F.R. Part 674 discusses loan cancellation in specific
circumstances, such as working full-time as a teacher
or nurse, or being the widow of a victim of September
11.
The Secretary has previously addressed Subpart D
in making HEROES Act modifications. “Generally, to
qualify for loan cancellation, borrowers must perform
uninterrupted, otherwise qualifying service for a specified length of time.” 68 Fed. Reg. at 69317. Since this
20
would disqualify, for example, borrowers on active
duty in the military, the Secretary has waived “the requirements … that such periods of service be uninterrupted or consecutive, if the reason for the interruption is related to the borrower’s status as an affected
individual in this category.” Id. Therefore, while
teachers with Perkins Loans generally must “teach
full-time for a complete academic year or its equivalent” to qualify for limited cancellation, the HEROES
Act could permit an affected borrower to piece together portions of a year to qualify for that limited
cancellation. See 34 C.F.R. § 674.53(d).
The Secretary’s action in connection with the loanforgiveness program neither modifies nor waives the
requirements of subpart D. A modification, as illustrated in 2003, 68 Fed. Reg. at 69313, and again in
2012, 77 Fed. Reg. 59311-01, 59316 (Sept. 27, 2012),
does not eliminate a borrower’s liability. Rather, it
makes loan-cancellation programs more flexible to accommodate borrowers experiencing hardship because
of an unavoidable disaster or their commendable service. The Secretary’s attempt to “modify” loan cancellation programs—without referencing which programs are being modified or how they are being modified—again indicates he is creating a program, not
adjusting one.
34 C.F.R. §685.212. The final provision the Secretary claims to have modified, 34 C.F.R. § 685.212, lays
out the Secretary’s obligations with respect to loan
discharges in various circumstances. Specifically, this
provision’s subsections, labeled (a) through (k), say
what the Secretary should do:
(a) if the borrower dies;
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(b) if the borrower becomes totally and
permanently disabled;
(c) if the borrower’s loan-repayment obligations are discharged in bankruptcy;
(d) if the borrower’s school closes;
(e) if a loan is discharged based on false
certification of student eligibility or unauthorized payment under 34 C.F.R.
§ 685.215;
(f) if a loan is discharged under 34 C.F.R.
§ 685.216 for a school closure and the
school fails to make a required refund;
(g) if the Secretary receives a payment
after a loan is discharged;
(h) if a loan is discharged under the
teacher-loan-forgiveness program;
(i) if a loan is discharged under the Public Service Loan Forgiveness Program;
(j) if a borrower’s loan is discharged under a program relating to September 11
survivors; and
(k) if the borrower’s defense or application for discharge under specified provisions is approved.
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34 C.F.R. § 685.212.
Which of these subsections’ requirements does the
loan-forgiveness program waive or modify? None of
them. Instead, the program creates an altogether new
category of dischargeable loans not covered by the regulation. No statute empowers the Secretary to do that.
His doing so is therefore illegal.
CONCLUSION
The Court should affirm the judgment below.
23
DATED this 3rd day of February, 2023.
Respectfully submitted,
/s/ Melissa A. Holyoak
DAVE YOST
Ohio Attorney General
BENJAMIN M. FLOWERS
Ohio Solicitor General
SYLVIA MAY MAILMAN
Deputy Solicitor General
30 E. Broad St., 17th Fl.
Columbus, Ohio 43215
Telephone: (614) 466-8980
Email:
benjamin.flowers@ohioago.gov
SEAN D. REYES
Utah Attorney General
MELISSA HOLYOAK
Utah Solicitor General
Counsel of Record
350 N. State Street, Suite 230
P.O. Box 142320
Salt Lake City, UT 84114
Telephone: (801) 538-9600
Email:
melissaholyoak@agutah.gov
Counsel for Amici Curiae
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ADDITIONAL COUNSEL
Counsel for Amici States
STEVE MARSHALL
Attorney General
State of Alabama
TREG R. TAYLOR
Attorney General
State of Alaska
ASHLEY MOODY
Attorney General
State of Florida
CHRISTOPHER M. CARR
Attorney General
State of Georgia
RAÚL LABRADOR
Attorney General
State of Idaho
THEODORE E. ROKITA
Attorney General
State of Indiana
JEFF LANDRY
Attorney General
State of Louisiana
LYNN FITCH
Attorney General
State of Mississippi
AUSTIN KNUDSEN
Attorney General
State of Montana
JOHN M. FORMELLA
Attorney General
State of
New Hampshire
GENTNER DRUMMOND
Attorney General
State of Oklahoma
JONATHAN SKRMETTI
Attorney General
State of Tennessee
KEN PAXTON
Attorney General
State of Texas
PATRICK MORRISEY
Attorney General
State of West Virginia
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BRIDGET HILL
Attorney General
State of Wyoming
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.