Biden v. Nebraska: An Overview of the U.S. Supreme Court Decision on Student Loan Forgiveness

By Clayton Hamby –

The Secretary of Education’s student loan forgiveness program modified the provisions of the HEROES Act “only in the same sense that ‘the French Revolution modified the status of the French Nobility’ – it has abolished them and supplanted them with a new regime entirely.”[1] On June 30, 2023, the Supreme Court of the United States issued a 6-3 decision that canceled the Secretary’s program, which provided up to $20,000 of debt cancellation for Pell Grant recipients and up to $10,000 of debt cancellation for non-Pell Grant recipients.[2] The Secretary relied on the Higher Education Relief Opportunities for Students Act of 2003 (“HEROES Act”) for authority to implement such program.[3]

However, the Court disagreed with the Secretary’s reliance on the HEROES Act and argued the ordinary use and meaning of the words within the statute did not authorize such power.[4] Additionally, in its application of the major questions doctrine, the Court concluded that given the broad economic impact of the Secretary’s program, Congress did not “pass the HEROES Act with such power in mind.”[5] The Court concluded that decisions of such significance and consequence must reside with Congress.[6]

In her dissent, Justice Kagan argued that the Court “bl[ew] through a constitutional guardrail intended to keep courts acting like courts.”[7] The guardrail is that of standing, which requires the Court to hear cases only where a party has suffered a “concrete and particularized injury.”[8] The reliance on an injury to the legally protected interests of a third party does not satisfy this requirement, as Justice Kagan asserted is the case for the Plaintiffs.[9] She then rejected the majority’s application of the major questions doctrine and argued the Court exceeded the scope of its authority; she further argued that rather than respect the broad delegation powers of Congress, the Court became the arbiter of national policy, posing a threat to the democratic process.[10]

Part A of this article discusses the history of the HEROES Act, and the authority it grants to the Secretary. Part B briefly summarizes the background of Nebraska and the majority’s conclusion, respectively. Part C analyzes Justice Kagan’s dissent and her concerns of an overstep by the Court. The last section of this article addresses the perception of the Supreme Court in the public eye.


             In 2001, Congress enacted the HEROES Act shortly after the September 11 terrorist attacks to relieve and assist affected borrowers.[11] The law granted the Secretary of Education “waiver authority to respond to conditions in the national emergency” that resulted from the September 11 attacks.[12] The Act was set to expire in September of 2003; however, Congress passed the HEROES Act of 2003 that broadened the scope of the 2001 statute.[13] Specifically, Congress enabled the Secretary to act “as [he/she] deems necessary” in relation to any national emergency or military operation.[14] Further, the law permits the Secretary to “waive or modify any statutory or regulatory provision applicable to the student financial assistance program under Title IV of the [Education Act.]”[15] In 2022, the Secretary invoked such power in creating a program that would cancel “roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the amount owed by the other 23 million from $29,400 to $13,600.”[16]

B. The Majority

             In 2022, the Eastern District of Missouri held that none of the six states challenging the Secretary’s program had proper standing and dismissed the suit.[17] However, the 8th Circuit concluded that Missouri likely had standing, and issued a preliminary injunction on the program pending appeal.[18] Thus, the Supreme Court first analyzed whether the Plaintiff suffered a concrete and imminent harm to a legally protected interest.[19]

Missouri established the Missouri Higher Education Loan Authority (“MOHELA”) to assist prospective students in receiving college loans.[20] MOHELA has provided roughly “$230 million for development projects at Missouri colleges and universities and almost $300 million in grants and scholarships for Missouri students.”[21] If the Secretary’s forgiveness program were implemented, MOHELA would lose an estimated $44 million a year in fees.[22] The Court concluded that because MOHELA, an instrumentality that serves and is controlled by the state, was harmed, Missouri suffered an injury in fact and satisfied standing.[23]

The Court then addressed the limits of the “waive and modify” provision under the HEROES Act.[24] It noted that “modify” used in its ordinary sense means “to change moderately or in minor fashion.”[25] This language permits the Secretary to make modest adjustments rather than complete alterations.[26] The Court reasoned that because the adjustments in the Secretary’s forgiveness program were unprecedented and would cover virtually all borrowers, the Secretary exceeded his authority.[27]

In its evaluation of the term “waiver,” the Court stated that the Secretary’s attempted use of this power did not parallel those of prior invocations.[28] For example, the Secretary previously waived the requirement that for a student to receive a leave of absence, they must provide a written request.[29] On another occasion, the Secretary waived a provision which required certain entities to seek collection from students who defaulted on loans for the period in which they were affected.[30] Additionally, the Education Act lacks a provision requiring a student borrower to reimburse the government.[31] Further, in invoking his waiver authority, the Secretary failed to identify any provision that is actually waived in the program.[32]

“The question here is not whether something should be done; it is who has the authority to do it.”[33] In the Court’s final analysis, it noted the Secretary had never previously claimed powers of such significance.[34] According to a study issued by the Wharton School of the University of Pennsylvania, the forgiveness program will cost taxpayers roughly $500 billion depending on who qualifies as a covered borrower.[35] The Court concluded that Congress could not have intended to confer to the Secretary the power to “abolish $430 billion in student loans, completely cancelling loan balances for 20 million borrowers, as a pandemic winds down to its end[.]”[36]

C: The Dissent

             “The majority’s justification turns standing law from a pillar of a restrained judiciary into nothing more than ‘a lawyer’s game’” argued Justice Kagan concerning the majority’s standing rationale.[37] She referenced the well-founded principle that for a party to have standing, they must have “personal stake” in the pending litigation.[38] A generalized grievance, particularly one that relies on a third party’s interests and rights, does not satisfy standing.[39] Justice Kagan asserted that Missouri did so in relying on MOHELA’s injuries.[40] Further, MOHELA is “financially independent from Missouri–as corporations typically are, the better to insulate their creators from financial loss.”[41] Thus, MOHELA’s injury, a decline in revenue, is not an injury in fact to Missouri and the Court violated the Constitution in deciding this case.[42]

The dissent then assessed the majority’s conclusion concerning the “waiver or modify” provision of the HEROES Act.[43] “To ‘waive or modify’ a requirement means to lessen its effect, from the slightest adjustment up to eliminating it altogether” argued Justice Kagan.[44] The majority circumvented this conclusion by defining the terms separately, rather than together.[45] The critical error for the majority was “reading ‘modify’ as if it were the only word” in the statute.[46] Justice Kagan noted the majority’s recognition of the importance of context in the interpretation of a statute.[47] However, the majority failed to consider a crucial piece of context of the HEROES Act – that the term ‘modify’ does not stand alone.[48] Could Congress have intended to permit the Secretary to “wholly eliminate a requirement, as well as to relax it just a little bit, but nothing in between?”[49]

In her final notes, Justice Kagan emphasized the danger in the Court deciding this case on the merits.[50] The key issue to the majority concerned “who has the authority” to make such critical decisions.[51] For Justice Kagan, “the answer, as is now becoming commonplace … this Court.”[52] This decision obstructs the ability of Congress to delegate broadly and make policy decisions best for the public.[53] Congress often delegates its power to agencies because of a lack of resources, changing circumstances, efficiency, and more.[54] “This Court now won’t let it reap the benefits of that choice.”[55]

D: Final Thoughts

It is difficult to understand how Nebraska, a case confined to student-debt cancellation, led to all six conservative Justices in the majority, and all three liberal Justices in the minority. The decision caused many to vocalize their concerns not only with the majority’s conclusion, but with the Supreme Court as an institution and the scope of its power.[56] Perhaps worried with the public perception of the Court with this decision, the majority stated, “reasonable minds may disagree with our analysis…it is important that the public not be misled either… such misrepresentation would be harmful to this institution and our country.”[57]

This article was originally published in the September/October 2023 issue of St. Louis Lawyer magazine by the Bar Association of Metropolitan St. Louis.

Clayton Hamby is a 2023 Summer Associate in the Litigation Department at Carmody MacDonald P.C. in St. Louis and a rising third-year law student at the University of Missouri – Columbia.

This article is for informational purposes only. Nothing herein should be treated as legal advice or as creating an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely upon advertisements.

[1] Biden v. Nebraska, 143 U.S. 2355, 2369 (2023) (citing MCI Telecomm. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 228 (1994)). [2] Id. at 2358. [3] Id. [4] Id. [5] Id. at 2374. [6] Id. at 2358. [7] Id. at 2388 (Kagan, J., dissenting). [8] Id. at 2386 (Kagan, J., dissenting). [9] Id. (Kagan, J., dissenting). [10] Id. at 2397-2398 (Kagan, J., dissenting). [11] Id. at 2363. [12] Id[13] Id[14] Id[15] Id[16] Id. at 2362. [17] Id. at 2357. [18] Id[19] Id. at 2365. [20] Id. at 2366. [21] Id[22] Id[23] Id. at 2368. [24] Id[25] Id[26] Id. at 2369. [27] Id[28] Id. at 2370. [29] Id[30] Id[31] Id[32] Id[33] Id. at 2358. [34] Id. at 2372. [35] Id. at 2373. [36] Id. at 2374. [37] Id. at 2389 (Kagan, J., dissenting) (quoting Massachusetts v. E.P.A., 549 U.S. 497, 548 (2007) (Roberts, C. J., dissenting)). [38] Id. at 2385 (Kagan, J., dissenting). [39] Id. at 2386 (Kagan, J., dissenting). [40] Id. (Kagan, J., dissenting). [41] Id. at 2387 (Kagan, J., dissenting). [42] Id. at 2389 (Kagan, J., dissenting). [43] Id. at 2391 (Kagan, J., dissenting). [44] Id. at 2392 (Kagan, J., dissenting). [45] Id. at 2394 (Kagan, J., dissenting). [46] Id. (Kagan, J., dissenting). [47] Id. (Kagan, J., dissenting). [48] Id. (Kagan, J., dissenting). [49] Id. (Kagan, J., dissenting). [50] Id. at 2398 (Kagan, J., dissenting). [51] Id. at 2397 (Kagan, J., dissenting). [52] Id. (Kagan, J., dissenting). [53] Id. (Kagan, J., dissenting). [54] Id. (Kagan, J., dissenting). [55] Id. (Kagan, J., dissenting). [56] See Ian Millhiser, The Supreme Court’s Lawless, Completely Partisan Student Loans Decision,  Explained, Vox (Jun. 30, 2023), [57] Id. at 2376.