On June 30, 2023, the U.S. Supreme Court decided Department of Education v. Brown, No. 22-535, holding that Plaintiffs — two individuals with student loans that were not covered to the full extent of a federal student loan forgiveness program — did not have standing to challenge the program.
Borrowers of federal student loans have not had to make payments on their debt since March of 2020, when student loan repayment was paused as a relief measure tied to the COVID-19 pandemic. In view of the eventual resumption of loan payments, the Department of Education announced that the federal government would discharge hundreds of billions of dollars in student loans, owed by millions of individual borrowers, under the HEROES Act. Plaintiffs challenged the policy on the ground that the Department should have followed “notice and comment” and “negotiated rulemaking” procedures, claiming that they would have used those procedural mechanisms to argue that the forgiveness policy should be implemented under the Higher Education Act, not the HEROES Act.
A Northern District of Texas district court found that the Department exceeded its authority in promulgating the loan forgiveness plan. The Supreme Court granted certiorari before judgment and heard the case alongside another challenge to the forgiveness plan, Biden v. Nebraska, No. 22-506. The Supreme Court reversed and vacated the district court judgment, finding that Plaintiffs did not have standing under Article III of the Constitution to bring their challenge.
The Court began by stating that, for standing to exist under Article III, three conditions must be met: (1) a plaintiff must have suffered an “injury in fact”; (2) the injury must be “fairly traceable to the challenged action of the defendant”; and (3) it must be “likely . . . that the injury will be redressed by a favorable decision.” The Court held that the “traceability” element was lacking because it concluded that “the Department’s decision to give other people relief under a different statutory scheme did not cause respondents not to obtain the benefits they want.” Instead, the Court reasoned, “the Department has simply chosen not to give them the relief they want.” According to the Court, if Plaintiffs in this case had standing to challenge the Department’s policy, so would “anyone who might benefit from a benefits program the Government has not chosen to adopt.”
Justice Alito delivered the opinion for a unanimous Court.
The Court reached the merits of a challenge to the loan-forgiveness program in Biden v. Nebraska, No. 22-506, which also was decided by the Court on June 30, 2023.