Amicus Brief: State of Nebraska, et al. v. Joseph R. Biden, et al.

Washington, DC (February 3, 2023) – The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, filed an amicus curiae brief in the U.S. Supreme Court today supporting two cases challenging the Biden Administration’s unlawful student loan debt cancellation plan. Biden v. Nebraska and Department of Education v. Brown contest the government’s invocation of the HEROES Act to rewrite statutory provisions and cancel some half a trillion dollars owed to the Treasury, which violates both the Vesting and Appropriations Clauses of Article I of the Constitution. NCLA has also challenged the Loan Cancellation Program in an original lawsuit on behalf of the Cato Institute in a separate case pending in the United States District Court for the District of Kansas.

NCLA’s brief offers the Court an alternative basis to find standing for the states, which has been a sticking point thus far in lawsuits against the Loan Cancellation Plan. Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina would suffer concrete injuries from the government’s unlawful debt cancellation plan because it undermines the Public Service Loan Forgiveness (PSLF) program. Congress established the PSLF program in 2007 to encourage individuals who owe student-loan debt to seek employment with public-service employers, including state governments. Under the PSLF, borrowers can have their entire debt forgiven if they make 120 payments and work for 10 years at a covered employer. By cancelling their debt now, the Loan Cancellation Program reduces or removes the PSLF deferred-compensation incentive, thereby directly harming states’ ability to recruit and retain college-educated employees. 

Aside from standing, NCLA also argues that the HEROES Act would be unconstitutional if it really empowered an executive agency to rewrite statutes and appropriate funds. The Department of Education contends that the HEROES Act authorizes the Secretary of Education to wipe out a half-trillion dollars in debt owed to the United States by over 40 million borrowers. This flawed interpretation of the HEROES Act would trample on the Constitution’s prohibition against executive agencies exercising Congress’s exclusive powers to enact laws and appropriate funds. 

Finally, NCLA’s brief rebuts the Department’s false contention that debt cancellation is lawful because it allegedly relies on the same HEROES Act interpretation used to support the pause on student-loan payments and accrual of interest since March 2020. There are two problems with this line of thinking: First, it was Congress—not the Department—that paused payments and interest in March 2020 by enacting the CARES Act, but that authority expired in September 2020. Second, although the Department later invoked the HEROES Act to extend the pause on payments and accrual of interest, those actions were also unlawful. An agency cannot extend the congressionally enacted end date of a debt-relief program by administrative fiat.

Oral arguments are set for February 28.

NCLA released the following statements: 

“As NCLA’s amicus brief shows, the states have standing to oppose this extravagant abuse of administrative power because the Loan Cancellation Program interferes with them as employers who hire employees eligible for the Congressionally created Public Service Loan Forgiveness program. The HEROES Act does not empower the Department of Education to cancel student loan debt unilaterally, and the Supreme Court will see right through this unlawful scheme.”
— Mark Chenoweth, President and General Counsel, NCLA

“This half-trillion-dollar giveaway is the latest attempt by the Biden Administration to twist a narrow delegation of authority—here a post-9/11 law meant to assist actual heroes while they fight for our country—into breathtakingly broad power to reshape an entire industry. The Supreme Court has rejected the Administration’s prior attempts to pull an elephant out a mousehole in the eviction moratorium, vaccine mandate, and clean power plan cases. It should do the same here.”
— Sheng Li, Litigation Counsel, NCLA

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Washington, DC (October 25, 2022) – The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, has filed an amicus curiae brief in the lawsuit brought by six States—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina—to block the Biden Administration’s unlawful student loan debt cancellation plan. The U.S. Court of Appeals for the Eighth Circuit issued a stay of the executive action while it considers the States’ emergency request. NCLA urges the Eighth Circuit to halt the debt cancellation plan while it considers the States’ arguments on appeal because the plan is so obviously unconstitutional. Specifically, the U.S. Department of Education’s invocation of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 to rewrite statutory provisions to cancel hundreds of billions of dollars owed to the Treasury violates both the Vesting and Appropriations Clauses of the Constitution.

The Department of Education’s scheme is legislative in character because it amends laws duly passed by Congress. It is also an appropriation because any amount of canceled debt directly reduces funds that would otherwise flow into the Treasury. The HEROES Act would be unquestionably unconstitutional if it empowered an executive agency like the Department of Education to amend statutes and appropriate funds. Yet, that is in essence what the Biden Administration (mis)interprets that law to do. In short, the Department of Education relies on an unconstitutional interpretation of the HEROES Act to justify its unlawful mass debt cancellation.

Plaintiff States also would suffer concrete and irreparable injuries absent an injunction. In addition to the injuries set forth in the Motion for Injunction Pending Appeal, the student loan debt cancellation plan further injures the States by taking away congressionally enacted incentives under the Public Service Loan Forgiveness (PSLF) program for student-loan borrowers to find and maintain employment at state agencies. NCLA represents the Cato Institute in the U.S. District Court for the District of Kansas in a similar challenge to the Biden Administration’s invocation of the HEROES Act to cancel hundreds of billions of dollars of federally held student debt. Like 501(c)(3) organizations, States benefit as employers from the incentive scheme built into the PSLF. And, like nonprofit employers, States as employers will be irreparably harmed by the Biden Administration’s unlawful infringement of the PSLF’s incentive structure.

The government argues that the HEROES Act should be read broadly to grant it license to make virtually any modification or waiver of prior acts of Congress it deems necessary to address the Covid-19 pandemic, including wiping out debt owed to the Treasury. But if construed so broadly, the Act would divest to an executive agency Congress’s sole power to make laws and appropriate funds, in violation of Article I of the Constitution. Adherence to the separation-of-powers principles embedded in the Constitution is, in NCLA’s view, essential to maintaining our Republic’s representative form of government.

NCLA released the following statements:

“This attempt to wipe out a half-trillion dollars of debt owed to the Treasury is an obviously unconstitutional attempt by the President to usurp Congress’s power of the purse. The President is attempting a fait accompli before courts intervene—he knows that once the ledger is illegally wiped clean, there is little hope of recouping losses to the public fisc. An injunction pending appeal exists for this precise scenario: to halt a clearly unlawful action that cannot be undone.”
— Sheng Li, Litigation Counsel, NCLA

“The States are financially affected by this lawless action and should have standing to bring the matter to court. It is amazing that even the proponents of this action can barely allege a legal basis for it. The Constitution puts the ‘power of the purse’ in Congress. That is where it should stay.”
— John J. Vecchione, Senior Litigation Counsel, NCLA

For more information about this issue visit here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

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