Biden v. Nebraska
The Supreme Court struck down the Biden administration's student loan forgiveness program, ruling that the Secretary of Education lacked legal authority under the HEROES Act to cancel $430 billion in debt on his own.
The decision establishes that executive action of such sweeping economic and political magnitude — covering nearly every student borrower in the country — requires clear authorization from Congress, not just a broadly worded emergency statute.
How it got here: A federal district court dismissed the case for lack of standing; the Eighth Circuit issued a preliminary nationwide injunction; the Supreme Court took the case directly before the Eighth Circuit ruled on the merits.
The Case in Depth
What happened
The Biden administration's Secretary of Education announced a plan to cancel up to $10,000 in federal student loan debt (up to $20,000 for Pell Grant recipients) for borrowers earning under $125,000 a year, invoking emergency powers under the HEROES Act during the COVID-19 pandemic. The plan covered roughly 43 million borrowers and would have erased about $430 billion in loan principal. Six states sued, arguing the Secretary had no legal authority to issue the plan.
The question before the Court
Did the Secretary of Education have legal authority to cancel roughly $430 billion in federal student loan debt by invoking emergency powers under a 2003 law called the HEROES Act?
The Court's answer
No — the Secretary of Education lacked authority under the HEROES Act to cancel $430 billion in student loan debt. The Act allows the Secretary to "waive or modify" existing student-loan rules during a national emergency, but the Court held that "modify" means making moderate, minor changes — not creating an entirely new loan forgiveness program covering 43 million borrowers. The Secretary could not identify any specific provision he was actually waiving, and his plan went far beyond adjusting existing rules; it built a new forgiveness regime from scratch.
The Court also applied the major questions principle — the idea that when an executive agency claims authority over something of vast economic and political significance, it needs clear authorization from Congress. A program canceling $430 billion in federal debt is precisely such a major question. The HEROES Act, whose prior uses had all been narrow and modest, provided no such clear authorization.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
About 43 million borrowers who expected up to $10,000 — or $20,000 for Pell Grant recipients — in debt relief will not receive it under this program. Beyond student loans, the ruling reinforces that federal agencies cannot use broad emergency language to justify massive policy changes; future administrations seeking similar relief would need Congress to pass a law explicitly authorizing it.
What changes now
The case is sent back to the federal district court for further proceedings. The student loan forgiveness program remains blocked, meaning the estimated 43 million borrowers who expected relief will not receive it under this plan. Congress retains the ability to authorize loan forgiveness by passing legislation that explicitly grants the Secretary that power. Any future executive action of comparable scale would face the same requirement of clear statutory authorization from Congress.
What this does not decide
The Court explicitly says it does not decide whether the earlier COVID-era suspension of loan repayments and interest accrual was also unlawful under the HEROES Act, noting that challenge "may involve different considerations." The ruling also does not address what smaller-scale emergency student loan relief might still be permissible.
Concurrences and dissents
Concurrence — Justice Barrett
Justice Barrett joined the majority fully but wrote separately to defend the major questions principle against the charge that it is inconsistent with textualism. She argues the doctrine is not a rule that forces courts to choose an inferior statutory reading to protect nondelegation values; rather, it is a contextual interpretive tool reflecting common sense about how Congress delegates. Just as a parent giving a babysitter a credit card to 'make sure the kids have fun' does not authorize a multiday out-of-state amusement park trip, a general statutory grant does not authorize extraordinary agency action without clearer signals.
Dissent — Justice Kagan
Justice Kagan's dissent argues the Court had no business deciding this case at all, because Missouri's injury is MOHELA's alone — MOHELA is a legally and financially independent corporation whose revenue losses do not flow to the State. On the merits, she argues the HEROES Act's 'waive or modify any statutory or regulatory provision' language is broad enough to cover the Secretary's plan when read as a whole. She characterizes the major questions doctrine as a 'judicially manufactured' tool that lets the Court override Congress's deliberate choice to give agencies broad emergency authority, substituting the Court's policy preferences for those of the democratically accountable branches.
How the Court got there
The legal reasoning, step by step
- Missouri has standing to sue because MOHELA — a public corporation created by Missouri to participate in the student loan market — would lose an estimated $44 million per year in loan-servicing fees under the forgiveness plan. The Court held that because MOHELA is a state instrumentality, created, supervised, and controlled by Missouri to serve a public purpose, harm to MOHELA is a direct injury to Missouri itself.
- The HEROES Act allows the Secretary to 'waive or modify' existing rules, but the word 'modify' — as the Court had defined it in an earlier telecommunications case (MCI Telecommunications, 1994) — means 'to change moderately or in minor fashion,' not to make basic and fundamental changes. Every prior use of the HEROES Act had been narrow: extending deadlines, waiving paperwork requirements, easing minor procedural rules.
- The Secretary's debt cancellation plan was not a permissible 'modification.' It replaced a narrow set of congressionally specified discharge situations — covering death, disability, bankruptcy, and school malfeasance — with a sweeping new program automatically covering 98.5% of all borrowers. That is not a moderate adjustment; it is the wholesale creation of a new legal regime.
- The Secretary's invocation of 'waiver' authority fared no better. On prior occasions, waiver under the HEROES Act meant nullifying a specific identified legal requirement. Here, the Secretary could not point to a specific provision being waived — borrowers have no statutory obligation to repay that could simply be 'waived' — so the plan ultimately depended on 'modifications' the statute cannot support.
- The Court then applied the major questions principle — which says that when an executive agency claims authority over a matter of enormous economic and political significance, courts require clear congressional authorization rather than inferring it from broad or ambiguous language. This principle reflects both separation-of-powers values and common-sense legislative intent: Congress handles the big policy calls itself.
- The Secretary's loan cancellation plan checked every indicator for a major question: it would cost $430–519 billion (roughly one-third of annual discretionary spending), it affected virtually every student borrower, the Secretary had never previously claimed such power under the HEROES Act, and Congress had actively debated but declined to pass similar legislation. The HEROES Act provided no clear congressional authorization for a program of this scale, so the plan exceeded the Secretary's authority.
Doctrinal impact
Cases affected by this decision
Reaffirms West Virginia v. EPA (597 U. S. ___)
The major questions principle requiring clear congressional authorization for sweeping agency action applies equally here.
Reaffirms MCI Telecommunications Corp. v. American Telephone & Telegraph Co. (512 U. S. 218)
The word 'modify' means minor or moderate change, not a fundamental transformation of a statutory scheme.
Reaffirms Arkansas v. Texas (346 U. S. 368)
A state may sue on behalf of a public instrumentality it created and controls when that entity suffers harm.