Lincoln — There are many good reasons why Nebraska should drop its lawsuit against the Biden administration's student loan cancellations. No court has yet agreed that Nebraska has standing to sue, and now comes the news that Nebraska's economy is headed into decline in 2023.
A move by Nebraska leadership to withdraw the lawsuit would be a huge help to the Nebraska economy, a boost of billions of dollars in increased capacity for over two hundred thousand Nebraska borrowers to grow in-state roots, households, and families.
This unavoidable point is being raised in one of several new amici curiae briefs presented to the U.S. Supreme Court. A coalition of 21 amici writes:
Without cancellation, a borrower’s ability to pay for basic necessities, invest in affordable housing, or buy items like a car will be minimal; in contrast, cancellation allows borrowers to save for a down payment or make larger purchases. In turn, these purchases put money into the economy and provide more tax revenue to the Plaintiff States. [Emphasis added]
These revenue benefits to the plaintiff states are more than enough for the Supreme Court to throw the case out for lack of any plaintiff''s standing. The court may see this as an opportunity to signal potential state government plaintiffs, everywhere, that speculative, circuitous arguments about irreparable harm, merely to challenge policies states don't like — or want to politicize — will not be sufficient to upend decades of jurisprudence on requirements for standing.
Another amici brief, from law school deans and constitutional lawyers across the country, pushed back against the idea that the Department of Education's cancellations raise "major questions" beyond what is already authorized by statute, as if the case were similar to what the high court recently determined on major questions in EPA v. West Virginia. The constitutional scholars write:
The Department is not asserting jurisdiction over matters not previously within its purview or trying to regulate topics Congress never assigned to it; it is acting in the center of its statutory authority. The Secretary’s HEROES Act waiver and modification authority falls squarely within the responsibilities Congress has vested in the Secretary. For example, in tasking the Department of Education with carrying out the purposes of the federal student loan programs, Congress already authorized the Secretary to modify “any . . . provision of any note evidencing a loan” made under Title IV and to “compromise, waive, or release any right, title, claim, lien, or demand,” among other powers. 20 U.S.C. § 1087hh(1)-(2). Given that Congress expressly authorized the Secretary to modify, compromise, or release federal student loan debt, the Department’s use of its HEROES Act authority to do exactly that hardly represents a “transformative expansion” or “radical or fundamental change” in its power. West Virginia, 142 S. Ct. at 2609-10.... [Emphasis added]
This presents an opportunity for Chief Justice John Roberts to find a middle ground majority within the court for narrower rulings, as he has tried to do in the past, most notably in sustaining the Affordable Care Act by determining that Congress was properly using its power to tax when it established penalties against the uninsured. Here, the question is much easier: the HEROES Act aside, the Secretary of Education already has explicit statutory powers to cancel student loans. Thus, this is the perfect opportunity for the court to put guard rails around its sweeping West Virginia decision.
It should not be lost on anyone that dragging out this lawsuit also hurts the federal treasury. The sooner it is resolved for borrowers, the sooner a majority of borrowers go back into loan repayment, many with more manageable debt that facilitates repayment, and the sooner borrower accounts can be closed if their balances are within the cancellation targeting limits. The longer it drags out, the more unmanageable the student loan program becomes and the more inequities arise. Why should a repayment pause extension, to accommodate the Nebraska lawsuit, benefit higher income borrowers at the expense those who are victims of appallingly bad loan servicing and debt traps, and who badly need immediate remediation?
Nebraska Governor-elect Jim Pillen is being left with many messes on his hands by his predecessor, not the least of which is a weakened economy that needs student loan cancellations to turn it around. Moreover, without the cancellations, many borrowers will be leaving the state to seek better opportunities elsewhere, despite Pillen's rhetoric about keeping more Nebraskans at home. Why stay in Nebraska, where water is increasingly poisoned by nitrates, where opposition to immigrants is holding back industry, where state government has become an instrument of one monied family, and where the attorney general spends his time looking for divisive, counterproductive lawsuits to join or to lead, like Nebraska v. Biden.
Governor-elect Jim Pillen and Attorney General-elect Mike Hilgers should huddle and resolve to look for multiple-win opportunities in litigation. Dropping the opposition to student loan cancellations would be a win for the Nebraska economy, for aggrieved borrowers, for equity, and for the federal treasury. Seldom do any two Nebraskans have the chance to make such a positive contribution to the state and to the whole country.
They should announce now that they will drop the lawsuit.