This past week, the United States Supreme Court heard challenges to President Biden’s program giving partial student loan forgiveness.  There are two separate cases (one brought primarily by Republican states and one brought by individuals), but the issues in the two case are relatively similar.

The first issue in both cases is standing.  For those unfamilar with standing, it derives from the Constitution’s language giving federal courts authority to decide cases and controversies.  Traditionally, courts have viewed this language as barring the ability of parties from requesting “advisory opinions” about how courts would rule if the parties did X.  As such, the courts require a real dispute.  More importantly, standing is concerned about who brings the dispute.  In simplest terms, a party can’t bring a case merely because they don’t like what the other party is doing.  The party bringing the case must be injured by the opposiing party’s actions in a way that can be fixed by the court.  Under the federal system, the state governments do not have the right to challenge the acts of the federal government merely because a given state disagrees with the federal government’s decisions. They have to show that the federal government’s acts injure that state.

For the state challenge, the lower court found standing based on the impact of loan forgiveness of MOHELA.  To understand the issue, one needs to know what MOHELA is.  Several of the states over the years have gotten heavily involved in the processing and handling of student loans.  I remember that when I was in law school, my student loans were handled by the Pennsylvania equivalent of MOHELA.  While I do not know the structural details of all of these agencies, MOHELA is somewhat equivalent to Fannie Mae.  Like Fannie Mae, MOHELA is a separate entity from the state government.  MOHELA is not a party to the case.  The question for the Supreme Court is whether Missouri has the right to speak for MOHELA.  If there is a decision in favor of the student loan forgiveness program, it is likely to be based on the theory that Missouri is not MOHELA and Missouri has not shown that it will be harmed if MOHELA is harmed.   If Missouri does not have the right to sue on behalf of MOHELA, it is unclear how any of the state governments has standing on any other theory. Continue Reading...