ABC wonders: Will Biden’s Academia bailout survive a court challenge?

Source: Hot Air

Answer: Almost certainly not … if someone can actually get Joe Biden’s Academia bailout into court. The White House has come up with a series of ridiculous defenses for an unconstitutional arrogation of appropriation authority, none of which remotely justifies Biden’s action in a legal sense. If this gets a sustained legal challenge, Biden’s action will almost certainly get thrown out by a court.

That’s a big if, as ABC News notes in this round-up. First, let’s review the Biden administration’s legal position:

The Department of Education, alongside the Department of Justice, released a legal opinion last Tuesday in defense of the groundbreaking administrative move, citing the HEROES Act.

The act provides the Secretary of Education broad authority to grant relief from student loan requirements during specific periods — such as the ongoing COVID-19 pandemic — for particular purposes, like addressing financial harms of wars or national emergencies.

“The Secretary of Education has used this authority, under both this and every prior administration since the Act’s passage, to provide relief to borrowers in connection with a war, other military operation, or national emergency, including the ongoing moratorium on student loan payments and interest,” the opinion reads.

“Relief” in this case has been temporary in these instances, and also during the emergency in question. The Biden administration is already on record in other court cases that the COVID-19 emergency is over, most notably in its legal fight to stop the Title 42 enforcement on the border. For that matter, Biden pulled the US out of Afghanistan a year ago in a catastrophic retreat, so he can’t even claim it as a war power. The students in question assumed almost all of this debt prior to the pandemic; schools were closed for a portion of it, so there arguably was less connection between the pandemic and student debt.

Furthermore, Biden has also been arguing that the economy has fully recovered from the pandemic and that employment is at all-time lows. So what’s the economic emergency that requires executive-only action under the HEROES Act?

ABC’s legal analysts are skeptical:

“Recent rulings from the Supreme Court suggest that at least some of the justices on the current court could view sweeping executive action like this as running afoul of congressional intent,” Adam S. Minsky, a student loan attorney, told ABC News. “But this is not necessarily the same type of case that was recently decided.” …

Jed Shugerman, a professor at Fordham Law, said he doesn’t see the order “surviving a legal challenge.”

“My bottom line is that if the Biden administration wants to prevail in an inevitable legal challenge, it needs to switch to the more appropriate statute as the legal basis for this policy (under the Higher Education Act of 1965) or significantly narrow its policy for specific COVID relief claims (and even then, it would be vulnerable),” Shugerman told ABC News.

The Supreme Court made its position clear on the Major Questions Doctrine in West Virginia v EPA, the case to which Minsky likely refers. It’s not the exact same kind of case as Biden’s student-loan spending spree, but it’s close enough. The EPA and the Biden administration tried to expand the Clean Air Act to regulate carbon-dioxide emissions and implement its Clean Power Plan to greatly expand federal jurisdiction over power generation. This also parallels the two rebukes that the Biden administration got from the Supreme Court over the CDC’s eviction moratoria, which they ruled — twice — exceeded the CDC’s regulatory authority.

This situation parallels those cases closely enough, however. There is nothing in the HEROES Act of 2020 that grants the executive the authority to appropriate hundreds of billions of dollars for wiping out student debt. Title V of the HEROES Act only provided — under congressional authorization — appropriated funds for Treasury to pay the monthly loan installments for students through September 2021, as well as suspension of “involuntary collections.” Congress only authorized Treasury to spend $45 billion for that entire student-loan suspension program, funds that were already long spent before Biden announced his bailout plan.

This HEROES Act argument is nonsense, especially given the exclusive constitutional authority Congress has to appropriate funds, let alone the major-questions doctrine precedents of late from the Supreme Court. To make those arguments, however, one has to have legal standing to act as plaintiff in a court challenge. And that is trickier than one might imagine, although Republicans are working on it:

That reasoning is almost certain to be challenged in court. But who can legally challenge the order is unclear. As soon as Biden announced his order, various conservative legal groups began exploring who would have legal standing to sue, which would require proving they would be harmed by Biden’s order. One possibility: the House could sue over the order next year, if Republicans win enough seats to take control in the fall.

That may be too late to stop disbursements under Biden’s plan, although his complete lack of preparation for the announcement probably means that any bailout activities are still a few months out. What about other groups? The best bet may be companies that will lose out on fees over the next several years, but after that it gets dicey:

Companies that service the student loans may attempt to prove they’ve been harmed. A person who makes an income just over the $125,000 threshold for forgiveness could potentially claim to have standing. …

The Job Creators Network Foundation Legal Action Fund, which successfully sued the Biden administration in 2021 over vaccine mandates on behalf of small business owners, is “actively weighting its legal options,” says President and CEO Alfredo Ortiz in a statement.

“A student loan bailout will further exacerbate inflation, increase the deficit, and lead to higher taxes,” Ortiz continues. “It’s not fair to the untold number of Americans who paid back their college loans or never went to college and it doesn’t address the root causes of why college loans have become so expensive.”

Loan servicers would have the best potential for standing, but that would put them in the position of biting a hand that normally feeds them. That’s only a small risk, since the federal government will need loan servicers regardless of whether this bailout survives, but it might make them a bit more reluctant to get into a political fight. Taxpayer-interest groups may get some flexibility on standing in this instance from a court, considering the enormous impact of the program as well as its status as an appropriation not authorized by taxpayers’ elected representatives in Congress. That might be a bit too theoretical for a court, though, which usually demands a demonstration of potential concrete damages to grant standing.

In the end, Biden probably figures he wins no matter what. If a court doesn’t stop him, he gets to shower money on already well-positioned college graduates, who are more naturally Democrats. If he loses in court, Biden might do even better: he can claim credit for trying to bail out Academia while avoiding the inflationary impacts this policy would create. Biden figures either outcome will boost his political standing, and he’s betting $1 trillion of our money on that gamble.