New Research: The Basis of the Supreme Court Case against Student Debt Cancellation Is Fundamentally Flawed

New York, NY – Last August, President Biden announced his historic decision to relieve over 43 million borrowers of a crushing financial burden and cancel up to $20,000 of their student debt. In February, six Republican attorneys general sued to block this cancellation based on the claim that Missouri’s loan servicing company, the Higher Education Loan Authority of the State of Missouri (MOHELA), would suffer financial revenue losses if enacted. The deeply flawed Biden v. Nebraska case went directly to the Supreme Court, and now threatens the financial survival of millions and the legitimacy of the court.

A new analysis, published by the Roosevelt Institute and the Debt Collective, reveals that the financial loss claim is categorically false. In “The Suit against Student Debt Relief Doesn’t Add Up: Flawed Claims of Legal Standing in Biden v. Nebraska,” the authors’ research shows that MOHELA would actually see a substantial increase in its direct loan revenue for 2023, should the cancellation proposal be enacted—a fact that MOHELA’s internal documents confirm. According to their own financial analysis, MOHELA would make more revenue the first year after cancellation is processed than it did in 2022 or any year prior.

If the Supreme Court rules in favor of the Republican attorneys general and blocks the student debt cancellation proposal, it would not only harm tens of millions of borrowers, but would set a dangerous precedent for legal standing in future cases. As the expert authors demonstrate, by deciding on a case with such questionable and still-unproven claims to legal standing, the highest court could effectively sanction states’ lawfare against the federal government of an opposing party by radically expanding what counts as standing.

“At a moment when the Supreme Court’s legitimacy is already rapidly declining, the Biden v. Nebraska decision marks a pivotal moment in the ongoing politicization of the court,” said co-author Louise Seamster. “It is critical that the Supreme Court understands the true facts of this case and its potential impacts on borrowers, our broader economy, and our democracy.”

More about the authors:

• Louise Seamster is assistant professor of sociology and African American studies at the University of Iowa.
• Thomas Gokey is a co-founder of the Debt Collective and co-author of Can’t Pay Won’t Pay: The Case for Economic Disobedience and Debt Abolition.
• Eleni Schirmer is a postdoctoral researcher at Concordia University’s Social Justice Centre in Montréal, Québec. She organizes with the Debt Collective.
• Braxton Brewington is a spokesperson for the Debt Collective and a sociology PhD candidate at the University of North Carolina at Chapel Hill.

The Roosevelt Institute has long argued that SCOTUS is facing a “democracy deficit” and is biased toward elite and corporate interests. To learn more, see:

• “The Court’s Extremist Agenda to Dismantle 20th Century Gains” by Shahrzad Shams;
• “Solving Standing’s Corporate Bias: How Agencies Can Empower Advocates to Challenge Deregulation” by Rachael Klarman, Will Dobbs-Allsopp; and
• Off-Balance: Five Strategies for a Judiciary that Supports Democracy by Todd N. Tucker