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Washington Examiner
Restoring America
28 Feb 2023


NextImg:Biden student loan case: Missouri AG dismisses justices' standing concerns as 'red herring'

EXCLUSIVE — The Republican attorneys general leading the legal challenge to President Joe Biden 's student loan forgiveness plan are confident their case will succeed after the Supreme Court heard oral arguments in the case Tuesday.

In an interview with the Washington Examiner following the high-stakes day in court, Nebraska Attorney General Mike Hilgers and Missouri Attorney General Andrew Bailey, both Republicans, expressed optimism that the oral arguments in the case indicated their challenge to the Biden administration's loan forgiveness plan would ultimately succeed.

BERNIE SANDERS AND ELIZABETH WARREN PROTEST AT SUPREME COURT TO BACK STUDENT LOAN RELIEF

The case hinges on two questions. The first is whether or not the challengers to the policy can point to a tangible harm and have standing to sue. If standing is granted, then the question becomes whether or not the president was within his legal authority when he announced a plan to cancel up to $20,000 in federally held student loans for borrowers making less than $125,000.

"It's always hard reading tea leaves, but I think on our standing, we felt really good," Hilgers told the Washington Examiner. "I don't think the court asked any questions that really put our standing argument at risk."

Hilgers's optimism was echoed by Nebraska Solicitor General James Campbell, who argued the case before the court and said that the coalition of states and an accompanying case brought by a private entity had strong legal arguments for standing.

"Both parties, the states in our case, and the private parties in the other case had strong standing arguments," Campbell. "The court just needs to get to the merits, and once it gets to the merits, we're hopeful that a majority of the court will find the program was unauthorized."

The state coalition, led by Nebraska, argued that the Missouri Higher Education Loan Authority, or MOHELA, an independent entity created by the Missouri state government to collect student loans, would be unable to meet its required contributions to the state treasury if the forgiveness plan went into effect, thereby harming the state's finances.

During oral arguments, several of the justices pressed Campbell on why MOHELA had not filed the lawsuit and was instead represented by the Missouri state government and the rest of the states challenging the policy.

"Under state law in the state of Missouri, the attorney general represents the interests of the state," Bailey said. "Since MOHELA is an instrumentality of the state that performs essential public functions of the state, I have authority under state law to be here in that capacity."

"I felt like that was a little bit of a red herring," the Missouri attorney general said of the concerns over MOHELA's nonparticipation in the case. "We go to court all the time to represent client agencies. The client agencies aren't necessarily there with us because we represent the state of Missouri."

But despite the sharp questioning from the high court on the standing issue, Hilgers said his team felt strongly that Missouri and other states are able to sue on behalf of state-created organizations like MOHELA.

"Coming out of the argument we still feel very strong that the state of Missouri is doing what the state of Nebraska could do in another context, which is should be able to sue on [behalf of] these constituent, public instrumentalities," Hilgers said.

Both attorneys general said the main issue with the Biden administration's loan forgiveness plan boiled down to the constitution's separation of powers. Hilgers said if the court upholds the policy, it would embolden future presidential administrations to enact similarly broad policies without congressional approval.

"If the administration's action is found to be lawful ... [it will] just encourage future administrations, whether it's a Republican administration or a Democratic administration, to look for truly obscure illegal hooks in the U.S. code to justify major and massive orders," Hilgers said.

"The power of the purse ceases to be anything if the president can unilaterally transfer half a trillion dollars out of the Treasury to a pet project," Bailey added. "That completely nullifies the power of the purse as provided in the constitutional structures envisioned by the founders."

Biden's student loan policy, which has been blocked by federal courts prior to the Supreme Court's review, would cost $400 billion over the next decade, according to the Congressional Budget Office. A separate study from the University of Pennsylvania's Wharton School of Business pegged the cost to easily exceed $500 billion.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

The cost could tick up beyond $1 trillion if the student loan plan is coupled with Biden's proposed changes to the income-driven repayment program, which allows low-income borrowers to make lower monthly payments than their loan would otherwise provide.

A final decision on the legality of Biden's loan forgiveness policy is expected by the summer. If the court decides against moving forward with the debt relief program, loan payments are expected to resume by the end of August.