Mahalo MOHELA

Nebraska v. Biden was something of a surprise. Based on my read of the briefs and oral argument, I came to the tentative conclusion that Missouri lacked standing. But the Chief Justices’s opinion was more persuasive than I expected. Then again, the Chief can be extremely slippery with his legal analysis.

I have no idea if the Missouri Attorney General can sue on behalf of the Missouri Higher Education Loan Authority (MOHELA). The majority resolved this issue largely on the basis of Arkansas v. Texas, which allowed Arkansas to sue no behalf of the University of Arkansas. The dissent responded that the University of Arkansas lacked an independent basis to sue, while MOHELA does have such authority. Rather, the dissenters parsed through decisions of the Missouri Supreme Court which found that similar institutions were not instrumentalities of the state. Does the dissent accurately read Missouri law? Who knows?

It seems to me that the correct course here would have been for the Eighth Circuit to certify the question to the Missouri Supreme Court. That body could have authoritatively resolved the status of MOHELA. Given that the Supreme Court’s ruling sweeps nationwide (hello nationwide vacatur!), certification would have been appropriate. Instead, we are left with a standing analysis that is probably good for one ride. Well, if the Biden Administration goes forward with another executive action on student loan relief, Missouri can once again say mahalo MOHELA.

Moving onto the merits, I think the Court was on fairly strong textualist ground. (I’ll talk about the major question doctrine in another post.) The Chief’s discussion of “waive or modify” was far more persuasive than Justice Kagan’s attempt to splice “waive” and “modify” as distinct concepts. Moreover, I’m not even sure which provisions of law were being “waived.” The dissent put a lot of weight on the ability of the Secretary to modify the “terms.” But such a reading would allow the Secretary to enact virtually any changes to the statutory program. Of course, the majority does not address how Secretary DeVoss could have temporarily suspended interest payments. If the majority is right, then the Trump Administration acted unlawfully. I do not think that recent exercise of executive power serves as sufficient past practice to justify the Biden administration’s policy. But that history does weaken Nebraska’s case, however much.

In the end, the effect of Nebraska v. Biden was fairly broad–millions of well-educated Americans who received federally-subsidized loans will have to pay back the debt they agreed to pay back. But the legal consequences of this decision are fairly minor. This decision applies only to a rather obscure pocket of federal law, that had never before been used in this fashion. In another post, I will discuss the relationship between the student loan cases, and the never-ending DACA litigation.