Biden v. Nebraska
The Supreme Court struck down President Biden's student loan forgiveness program, ruling that the Education Secretary exceeded his legal authority by canceling $430 billion in federal student debt without clear approval from Congress.
The decision means tens of millions of borrowers who had been promised up to $10,000 — or $20,000 for Pell Grant recipients — in debt relief will not receive it, and it reinforces the Court's rule that agencies need explicit congressional authorization before acting on questions of massive economic and political significance.
“The question here is not whether something should be done; it is who has the authority to do it.”
The majority explaining why the political significance of student loan cancellation does not answer the legal question of which branch gets to act.
How it got here: A federal district court dismissed the states' challenge for lack of standing; the Eighth Circuit issued a nationwide injunction pending appeal; the Supreme Court took the case before the Eighth Circuit issued a final ruling on the merits.
The Case in Depth
What happened
The Biden administration announced a plan to cancel up to $10,000 in student loan debt — up to $20,000 for Pell Grant recipients — for borrowers earning under $125,000. The plan would have completely erased the debt of about 20 million people and reduced balances for 23 million more, costing roughly $430 billion. Six states challenged the plan, arguing the Education Secretary had no authority to create such a sweeping forgiveness program.
The question before the Court
Did the Education Secretary have legal authority under a 2003 emergency relief law to cancel roughly $430 billion in federal student loan debt for tens of millions of borrowers?
The Court's answer
No — the Secretary of Education did not have authority under the HEROES Act to cancel $430 billion in student loan debt for tens of millions of borrowers. The Act allows the Secretary to "waive or modify" student loan rules during national emergencies, but those words carry their ordinary meanings: modest, incremental adjustments, not a wholesale rewrite of federal loan law. Every prior use of the Act had been narrow and procedural; the forgiveness plan, by contrast, eliminated virtually all prior eligibility limits and covered 98.5% of all borrowers — a transformation, not a modification.
The Court also applied the "major questions doctrine," which requires agencies to point to clear congressional authorization before acting on issues of vast economic and political significance. Canceling $430 billion in debt and erasing the obligations of 43 million people is precisely the kind of far-reaching policy that Congress must explicitly approve. The HEROES Act's general emergency language falls far short of that standard, and the fact that Congress repeatedly debated — but never passed — broad student loan forgiveness legislation confirmed that this is a decision for the legislative branch, not an executive agency acting alone.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Tens of millions of student loan borrowers who qualified for up to $10,000 or $20,000 in cancellation will not receive that relief. More broadly, the ruling signals that federal agencies cannot use general emergency-authority language to justify sweeping, expensive programs — a constraint likely to affect how future administrations design large-scale benefit initiatives without specific congressional action.
What changes now
With the Supreme Court having ruled the plan unlawful, the tens of millions of borrowers who had anticipated debt relief will not receive it. The case returns to the district court for further proceedings consistent with the ruling, but nothing substantive remains to be resolved on the merits — the program is blocked. Advocates for student loan forgiveness would need to pursue relief through Congress, which would have to pass new legislation explicitly authorizing a broad cancellation program.
What this does not decide
The Court explicitly declined to rule on whether the COVID-era suspension of loan repayments and interest accrual — a separate HEROES Act action by the first Trump-era Education Secretary — was lawful, noting that challenge "may involve different considerations." The ruling also does not decide whether more targeted emergency student loan relief under the HEROES Act could be permissible in a future national emergency.
Concurrences and dissents
Concurrence — Justice Barrett
Justice Barrett joined the majority in full but wrote separately to address the theoretical foundations of the major questions doctrine. She argued the doctrine is not a 'clear statement' rule that demands Congress speak with unusual specificity before delegating significant power to agencies — a version she said would be in tension with textualism. Instead, she views it as an ordinary contextual interpretive tool: a reasonable reader of any statute would expect Congress to say more than a general phrase if it meant to hand an agency authority over decisions of enormous economic and political magnitude, just as a parent would say more than 'make sure the kids have fun' before authorizing a multiday road trip.
Dissent — Justice Kagan
Justice Kagan dissented on both standing and the merits. On standing, she argued Missouri had no injury because MOHELA is a legally and financially independent corporation — it, not Missouri, is the proper plaintiff, and the fact that Missouri chose not to sue does not change that. On the merits, she argued the HEROES Act's broad 'waive or modify any statutory or regulatory provision' language plainly authorized the Secretary's plan, and that the majority's major questions doctrine is a judicially invented tool used to override broad congressional delegations whenever the Court disapproves of the resulting policy — substituting the Court's judgment for that of the political branches.
How the Court got there
The legal reasoning, step by step
- The Court first addressed whether Missouri had the right to bring the lawsuit at all — a requirement called standing, which demands that a party have a direct personal stake in the case. The Education Secretary's plan would cost MOHELA, a nonprofit public corporation Missouri created to service student loans, roughly $44 million a year in lost fees. Because MOHELA is a state instrumentality — created by Missouri, governed by state-appointed officials, and answerable to the state — the Court held that financial harm to MOHELA is a direct injury to Missouri itself, giving the state the right to sue.
- Turning to the statute's text, the Court focused on the HEROES Act's grant of power to 'waive or modify' student loan rules during national emergencies. The word 'modify,' the Court explained, carries a connotation of incremental or limited change — to alter moderately or in minor fashion — not to fundamentally transform a statutory scheme. Prior to COVID-19, the Secretary's uses of the Act were consistently narrow: reducing paperwork, extending deadlines, waiving procedural requirements. The new forgiveness plan eliminated all prior eligibility conditions and applied to nearly every borrower in the country, which is not a modification in any ordinary sense.
- The Secretary argued that the word 'waive' — which can mean eliminating a requirement entirely — gives him broader authority, and that combined 'waive or modify' power allows him to reduce obligations to any extent short of full waiver. The Court rejected this reasoning: the Secretary had not actually identified any specific provision he was waiving, and in practice he had drafted an entirely new loan forgiveness program from scratch, filling the space left by eliminated provisions with new income-based eligibility rules and dollar limits. Neither 'waive' nor 'modify,' individually or combined, authorizes that kind of comprehensive statutory drafting.
- The Court then applied the 'major questions doctrine' — the principle, developed over several decades and reinforced last term in West Virginia v. EPA, that when an agency claims authority over a question of vast economic and political significance, courts require clear congressional authorization before accepting the claim. The forgiveness plan would cost between $469 billion and $519 billion by some estimates, affect practically every student borrower, and amount to nearly one-third of annual federal discretionary spending — making it among the most consequential administrative actions ever taken.
- Measured against that standard, the HEROES Act provides no clear authorization for mass debt cancellation. The Secretary had never before claimed such power under the Act; Congress had considered and declined to pass more than 80 student loan forgiveness bills; and the very breadth of the program — described by the Court as effectively introducing a whole new statutory regime — is the type of decision the Constitution entrusts to Congress, not to a department secretary acting under general emergency language.
Doctrinal impact
Cases affected by this decision
Reaffirms West Virginia v. EPA (597 U. S. ___)
The Court applies and extends the major questions doctrine from this recent case requiring clear congressional authorization for sweeping agency action.
Reaffirms MCI Telecommunications Corp. v. American Telephone & Telegraph Co. (512 U. S. 218)
The Court relies on MCI's holding that 'modify' means incremental change, not a fundamental transformation of a statutory scheme.
Reaffirms Arkansas v. Texas (346 U. S. 368)
The Court reaffirms that a state can sue on behalf of its official instrumentality when that entity suffers direct harm performing public functions.