[When it comes to student debt relief, the court’s conservative
justices appear willing to accept dubious standing claims to force
more debt onto millions of Americans.]
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NEW DOCUMENTS UNDERMINE SUPREME COURT STUDENT DEBT CASE  
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Julia Rock
May 2, 2023
The Lever
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_ When it comes to student debt relief, the court’s conservative
justices appear willing to accept dubious standing claims to force
more debt onto millions of Americans. _

Student debt relief advocates gather outside the Supreme Court in
Feb. 2023, ahead of arguments over President Joe Biden’s student
debt relief plan., AP Photo/Patrick Semansky

 

Newly unearthed documents show a major student loan servicer is
projecting revenue increases even under President Joe Biden’s debt
cancellation plan — directly undermining the argument Republican
officials are making in their lawsuit to block the measure. But
conservative justices on the Supreme Court appear prepared to strike
down the debt relief program anyways, disregarding the evidence and
their own legal theories to fulfill the wishes of the dark money
network that helped build their Supreme Court supermajority.

At issue is the concept of “standing” — a legal term for who is
allowed to bring a case to the judiciary. For years, the Supreme
Court’s conservative majority has consistently shut down cases they
don’t like by insisting that plaintiffs are unharmed and therefore
do not have standing to be in court. However, in Republicans’
current case attempting to block student debt relief, the same
conservative justices are ignoring financial records refuting any
claims of harm from the proposal.

Internal records from the Missouri student loan servicer that
Republican states are arguing would be harmed by Biden’s plan show
the entity has actually seen a massive revenue increase in recent
years that is projected to continue even if debt relief goes into
effect.

“There has been no fact-finding, no discovery, [and] the case was
rushed forward using a rare procedure,” said Astra Taylor, a
co-founder of the Debt Collective, a debtors’ union which unearthed
[[link removed]] the
new documents. “We are a very small group, we are half volunteers,
and we are doing the court’s homework, we are doing the
government’s work in finding these facts. And they are not
ambiguous.”

A key legacy of Chief Justice John Roberts’ tenure on the court has
been limiting access to the court through a narrow definition of
standing.

But conservative justices — installed on the court with the help of
conservative advocacy groups now bankrolling efforts to challenge
student debt relief — are apparently more willing to do the bidding
of right-wing donors than defend their purported judicial principles.

The new records further undermine already dubious claims to standing
in the challenge to the Biden administration’s student debt plan.

PROVING STANDING

The case in question deals with President Joe Biden’s plan
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cancel up to $10,000 in student debt for most federal borrowers (and
up to $20,000 for Pell Grant recipients). The way Biden crafted the
program made it vulnerable to legal challenges: Rather than canceling
the debt automatically, which would make it practically impossible for
courts to reverse, his plan required people to submit applications for
relief.

That arrangement gave the plan’s conservative opponents time to
organize against it. While they didn’t lack resources to fund the
fight, they were stumped
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how to prove standing.

Conservatives made numerous
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to come up
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plaintiffs
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had apparently been harmed by Biden’s modest debt cancellation plan.

Only two cases made it to the Supreme Court. In one of those cases,
the plaintiff argued she was being harmed by the plan because her
debt _wasn’t_ being forgiven, as she had private student loans.
(That plaintiff had accepted
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Paycheck Protection Program business loan — debt designed to be
forgiven by the government — the previous year.)

The other is the case brought by six Republican attorneys
general, _Biden v. Nebraska._ It made its way to the Supreme Court
through an expedited process_, _which bypassed the typical
fact-finding that happens in lower courts.

A George W. Bush-appointed federal district judge in
Missouri dismissed
[[link removed].] the
case, arguing the states didn’t have standing to sue. The states
appealed to the Eighth Circuit Court of Appeals, which granted an
injunction
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halting Biden’s cancellation plan amid legal challenges.

The Biden administration appealed that ruling to the Supreme Court,
which granted a “certiorari before judgment,” a rare petition
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asks the high court to hear cases before legal and factual issues have
been resolved by lower courts.

_Biden v. Nebraska_ rests on an argument that the Missouri government
would suffer lost revenue if the state’s quasi-governmental student
loan servicer, the Missouri Higher Education Loan Authority (MOHELA),
couldn’t collect the debt canceled by Biden.

During oral arguments in February, Nebraska Solicitor General James
Campbell claimed that Biden’s student debt forgiveness plan
“threatens to cut MOHELA’s operating revenue by 40 percent.”

Justice Elena Kagan asked Campbell why MOHELA itself hadn’t sued if
that was the case. “Here the state has derived very substantial
benefits from setting up MOHELA as an independent body with financial
distance from the state and sue and be-sued authority,” Kagan said.
“So why isn’t MOHELA responsible for deciding whether to bring
this suit?”

Campbell said MOHELA could have sued, but the state also had an
interest given the projected revenue losses.

However, no justice bothered to check whether the claim that MOHELA
would lose revenue was true. An advocacy organization known as the
Debt Collective, which has been pushing for Biden to cancel all
student debt, decided to check for themselves.

“Nobody Is Actually Harmed”

The group obtained internal financial documents from MOHELA, via
public records requests, showing that the entity has actually been
experiencing massive revenue _growth_ in recent years, and that
growth is projected to continue under Biden’s cancellation plan.

According to an analysis
[[link removed]] co-authored
by the Debt Collective and the Roosevelt Institute, a left-leaning
think tank, MOHELA will see a revenue increase even if Biden’s
cancellation goes into effect.

“Assuming President Biden’s proposed cancellation goes through, we
estimate that MOHELA will service more than twice the number of
accounts it serviced at the beginning of the COVID payment pause,”
the report said. “It will also earn nearly twice as much revenue
servicing federal direct loans as it has in any year prior to
cancellation. This finding is backed by MOHELA’s own internal impact
analysis, which shows it would make more revenue the first year after
cancellation is processed than it did in 2022 or any prior year.”

The internal documents reveal that MOHELA recently acquired a new loan
servicing contract, and so has actually seen a massive increase in its
accounts since the loan repayment pause took effect in 2020. Even if
Biden’s plan goes into effect, and an estimated two million of
MOHELA’s accounts had their debt fully canceled, the company would
still be servicing more accounts than before the pandemic.

Biden’s plan would end the current pause on student debt payments
— meaning the rate that MOHELA gets paid to service federal loans
will increase from $2 to nearly $3 per account if the plan goes into
effect.

“In their brief to the Supreme Court, the six GOP attorneys general
cited MOHELA’s 2022 financial statement, showing it made $88.9
million in revenue from servicing 5.2 million federal direct loans,
and then went on to argue that cancellation will harm MOHELA’s
revenues,” the report says. “This is 88 percent more than the
amount MOHELA made in 2022, and significantly more than it has made in
its entire history.”

The report supports an argument that proponents of debt cancellation
have been making for years: Nobody loses.

“It’s really hard to stop student debt cancellation because you
need to find someone who is harmed by it,” said Thomas Gokey, a
co-founder of the Debt Collective who authored the report. “And the
truth is, nobody is actually harmed by student debt cancellation. It
benefits everybody. It benefits people who don’t have student
debt.”

Dark Money Ties

The conservative officials attempting to block the Biden student debt
relief plan have deep ties to the dark money network that helped
construct the Supreme Court’s current 6-3 conservative
supermajority.

The student debt case in question was first brought
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Republican attorneys general in Missouri, Nebraska, Arkansas, Iowa,
Kansas, and South Carolina. Those officials have been backed
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Republican attorneys general in 17 more states.

“It’s patently unfair to saddle hard-working Americans with the
loan debt of those who chose to go to college,” Arkansas Attorney
General Leslie Rutledge, who led the lawsuit, said in
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statement.

She added: “The Department of Education is required, under the law,
to collect the balance due on loans. And President Biden does not have
the authority to override that.”

The longtime top donor to the Republican Attorneys General
Association, which elects GOP attorneys general, is the Concord Fund,
a dark money network led by conservative activist Leonard Leo.

As Donald Trump’s judicial adviser, Leo helped select three of the
Supreme Court’s six conservative justices, while the Concord Fund
spent tens of millions boosting their confirmation campaigns.

Leo’s network has funded
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other organizations filing
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the case, including the Foundation for Government Accountability and
the New Civil Liberties Alliance.

In theory, the new findings should have salience before the
conservative justices, because one of the primary legacies of the
Roberts court — besides legalizing dark money political
spending and
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forms
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corruption
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has been restricting
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has the standing to bring lawsuits.

Since he was appointed Chief Justice of the court in 2005, John
Roberts has argued for “judicial self-restraint” and setting
limits on who has standing to come before his court.

“I don’t think the courts should have a dominant role in society
and stressing society’s problems,” Roberts said
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his confirmation hearing. “What the standing doctrine requires is
that you actually be injured by what the government is doing, injured
by Congress’s action.”

In 2007, Roberts voted to overturn
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precedents on the basis that plaintiffs had missed filing deadlines by
just a couple of days. That year, he split
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in _Massachusetts v. EPA_, arguing in a dissent
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Massachusetts did not have standing to sue because the injuries from
global warming were not “particular” to the state.

In 2015, the liberal court watchdog the Constitutional Accountability
Center wrote
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a review of his first 10 years on the court that Roberts had dissented
in every “significant case during his tenure as Chief Justice in
which the court has refused to limit access to the courts, and he has
always been in the majority when it has decided to limit such
access.”

It’s a doctrine that the Roberts court has stood by in recent years.
In 2020, the court’s conservative justices ruled
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pensioners did not have standing to sue a bank that stole from their
pension fund, because their pensions had not yet lost money. (That
ruling just so happened to pave the way
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billionaire GOP donor and Trump advisor Steve Schwarzman to shut down
another case accusing financial firms of misleading pension funds.)

But when it comes to student debt relief, the court’s
conservative justices appear
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to accept dubious standing claims to force more debt onto millions of
Americans.

Two leading conservative legal theorists Samuel Bray and William Baude
pointed out this stunning hypocrisy in an amicus brief
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cast doubt on Missouri’s standing.

“Missouri has no standing to complain about the loan servicing fees
that the Missouri Higher Education Loan Authority (MOHELA) might
lose,” they wrote, also noting that the number of accounts MOHELA
was servicing had nearly doubled the previous year. “MOHELA is far
and away the most interested plaintiff, with Missouri’s claims being
merely derivative of MOHELA’s. MOHELA has chosen not to bring a
lawsuit, and as the ‘proper party’ to the suit, its decision ought
to carry the day.”

Baude and Bray wrote that “even if the executive branch has exceeded
its authority,” as conservatives argue, it “does not permit the
judicial branch to exceed its authority.”

_JULIA ROCK is a staff reporter at The Lever_

_THE LEVER, formerly known as The Daily Poster, is a
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