Debt relief on the docket

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SEEKING FORGIVENESS — The Supreme Court is set to hear arguments Tuesday about the legality of President Joe Biden’s $400 billion student debt relief program.

After its unveiling in August, the program that would provide up to $10,000 in loan forgiveness for most borrowers and $20,000 for Pell Grant recipients quickly generated a lawsuit from six Republican-led states, led by Nebraska and Missouri.

While the administration justified the program’s implementation by pointing to the economic hardships brought on by the Covid-19 pandemic, Republican officials and conservative groups claimed it was an abuse of executive power.

Nightly’s Katherine Long spoke with Michael Stratford, an education reporter for POLITICO Pro, on what this decision means for tens of millions of borrowers and the legal precedent it will set for federal student loan forgiveness.

Can you give us a sense of the scale of this case? How many borrowers are affected? How much money is at stake?

Most cases at the Supreme Court are necessarily high stakes, but we can put a pretty eye-catching dollar figure on this one: Roughly $400 billion of student debt relief is hanging in the balance for more than 40 million Americans. More than 25 million applications flooded into the Education Department last fall. Some 16 million were approved before the Biden administration was forced to shut down the program in response to court orders.

What legal questions are at issue here?

There are a few. The first is whether the six Republican-led states and two Texas student loan borrowers challenging the debt relief program are allowed to sue at all. How will they actually be harmed by debt relief?

Missouri has been the focus of a lot of attention in that regard. The state claims it’ll be injured because it may get less money from the Missouri Higher Education Loan Authority, a state-created entity, which will have fewer loans to collect if Biden cancels them.

If no party has standing, the case is over and Biden wins. (And many experts think that’s the administration’s best bet for survival.) Otherwise, the justices will turn to the merits of the case, which hinges on the interpretation of a 2003 law known as the HEROES Act.

The law says that the secretary of education is allowed to “waive or modify” the normal rules related to federal student loans to prevent borrowers from being “placed in a worse position financially” because of a national emergency.

Covid-19 is such an emergency, the administration contends. And it says that canceling debt for most borrowers will help avoid a surge of delinquencies and defaults when payments resume for the first time since the pandemic began.

Do we have any indication of where the court stands on any of the questions or issues at stake in this case?

That’s always a tough guessing-game to play. But what we know is that the conservative majority on this court has been hostile to Biden’s other pandemic-related emergency actions. It rejected Biden’s workplace Covid vaccine rule and his extension of the eviction moratorium.

And, more broadly, the Republican appointees have been deeply skeptical of the administrative powers of federal agencies. They struck down an EPA climate policy last year with a blueprint for reining in other agency actions.

One difference — and who knows if it will matter here — is that in all of those cases, the court was balancing a government action against strong business interests: landlords, employers, and other companies. Here we’re talking about the government doling out benefits to student loan borrowers. To be sure, conservatives and many taxpayers might be ideologically opposed to the Biden administration doing that. But there’s no major industry or business interest lining up outside the court to fight it.

What happens if the court rules against debt relief?

Politically, the Biden administration will blame, as it already has, Republican opponents of its plan for suing to block student debt relief to millions.

Practically-speaking, the administration is going to have to make a range of decisions about how, if at all, it’s going to collect loan payments from millions of borrowers to whom it promised relief.

Right now, the Biden administration is preparing to resume collecting monthly payments from most federal student loan borrowers in September (for the first time since March 2020). But that could change.

What does the outcome of this case mean for Biden’s presidency? If the court halts the program, what are his other options for tackling student debt?

The stakes are high not just for borrowers but for Biden as well. Many Democrats, including Biden himself, have suggested that mass student debt relief helped Democrats turn out voters last fall.

And now that progressives convinced Biden to act on mass debt cancellation, it seems impossible to un-ring that bell.

Expect Biden in the coming months to face pressure from within his own party to come up with a fallback plan to deliver on student debt relief. Progressives are eyeing using a separate legal authority in the Higher Education Act — known as compromise and settle — which is not tied to the pandemic national emergency.

Welcome to POLITICO Nightly. Reach out with news, tips and ideas at [email protected]. Or contact tonight’s author at [email protected] or on Twitter at @katherinealong.

What'd I Miss?

— Rep. Elissa Slotkin announces Senate run: Slotkin (D-Mich.) will run for the Senate seat being vacated by retiring Sen. Debbie Stabenow (D-Mich.). Slotkin is one of the first candidates to enter the race since Stabenow announced in January that she would not seek a fifth term, teeing up a high-stakes contest that could ultimately determine the balance of power in the Senate.

— Yellen makes surprise trip to Ukraine: Treasury Secretary Janet Yellen made an unannounced trip to Kyiv today to emphasize the Biden administration’s continued support for Ukraine as the country prepares for Russia’s highly-anticipated spring offensive. “I bring to Kyiv a clear message from Biden and the American people: We will stand with Ukraine for as long as it takes,” Yellen said during a meeting with Ukrainian President Volodymyr Zelenskyy.

— Kerry to stay on as Biden’s top climate diplomat: John Kerry will remain in his role as Biden’s special climate envoy at least through this year’s United Nations climate talks set for December in Dubai, ending speculation that the United States’ top climate change diplomat may soon depart. Kerry’s relationship with his Chinese counterpart, Xie Zhenhua, has been a rare bright spot between the United States and China.

Nightly Road to 2024

DONOR DASH — Potential and declared 2024 Republican presidential hopefuls including former UN Ambassador Nikki Haley, former Vice President Mike Pence and Virginia Gov. Glenn Youngkin are making quiet trips to New York City to meet with donors and attempt to raise money, according to The New York Times’ Maggie Haberman and Nicholas Fandos.

The Times reports that Youngkin will be meeting with grocery store magnate John Catsimatidis, a billionaire who owns chains of grocery stores and who is influential within the right-wing Committee to Unleash Prosperity, which has previously backed former President Donald Trump. Catsimatidis, a Trump backer himself, said that this cycle he will likely sit down with any candidate who asks to see him.

Youngkin’s trip suggests that he’s at least dipping his toe in the 2024 contest, getting a sense of the potential appetite among big donors for his candidacy. A former executive at the private equity firm the Carlyle Group, where he spent 25 years before resigning to run for Virginia governor in 2021, Youngkin still has strong ties with much of the GOP’s donor class, a potential advantage should he decide to jump into the race.

SPLIT SCREEN — There’s not one, but two major cattle calls of 2024 Republican hopefuls this week, report POLITICO’s Natalie Allison and Alex Isenstadt.

In Washington, D.C., Trump is headlining CPAC’s annual meeting. In Palm Beach, Florida Governor Ron DeSantis will be a main draw at the Club for Growth’s private retreat for large donors.

The events are set to take place at the exact same time — Thursday through Saturday. There’s also little overlap between the speakers and attendees, another sign that the conservative ecosystem is engaged in a battle for the future of the party, with Trump as a main divide.

Notably, Trump was not invited to the Club for Growth’s retreat, as the conservative organization looks to move beyond the former president. Other potential 2024 Republican hopefuls, including Haley, Sen. Tim Scott (R-S.C.) and New Hampshire Governor Chris Sununu will try to take advantage of the notable absence of Trump to speak with donors themselves.

AROUND THE WORLD

NIGERIA’S ELECTION — Early results from Saturday’s presidential race in Nigeria suggest that the ruling party’s Bola Tinubu, who served as governor of the country’s most populous state, has captured the lead in an election marred by technical delays and security concerns.

Two days after the election in Africa’s largest democracy, only a handful of Nigeria’s 36 states have been called, according to the country’s primary election commission, and the timeline for announcing a winner remains unclear.

The results that have already come in signal a firm lead for Tinubu, the ruling All Progressives Congress’s candidate. Tinubu has won at least five states and leads the popular tally.

The 93 million Nigerians who registered to vote — a record — were hit with long delays, electronic glitches and intimidation tactics on Saturday. Local news outlets reported assaults from armed irregulars and instances of ballot-box snatching. With sporadic violence breaking out across the country, tensions remain especially high in parts of Lagos State, where Tinubu served as former governor.

Politicians from all three parties represented on the presidential ballot voiced concerns over the slow pace at which results were being uploaded to the official Independent National Electoral Commission, which said ongoing delays are a result of “technical hitches.”

International observers also criticized the country’s handling of the election. Representatives from the European Union warned in a statement that “INEC lacked efficient planning and transparency during critical stages of the electoral process, while on election day trust in INEC was seen to further reduce due to delayed polling processes.”

Atiku Abubakar, from the Peoples Democratic Party, has the second-most votes as of this afternoon, according to the country’s electoral commission. Peter Obi, who joined the Nigerian Labour Party and is popular among young Nigerians, clinched a surprise victory in Lagos State, but continues to trail both his opponents.

To win the presidential election, a candidate must obtain a simple majority and earn at least a quarter of the total votes cast in at least 24 states. If no candidate meets the threshold, a runoff is triggered within 21 days.

Nightly Number

RADAR SWEEP

LAB LEAK? — In a recently updated U.S. intelligence report, the Department of Energy assessed that the Covid-19 pandemic may have originated from a laboratory leak in China. Other federal agencies involved with virus research said the pandemic could have been caused by natural transmission between animals and humans. But the disagreements from the scientific community stand in stark contrast to conclusions being drawn as a result of the DOE’s quote that the lab leak is the “most likely” explanation for the pandemic. For instance, an intelligence report is intended not to simply determine fact from fiction, but to provide an assessment of likelihood and the strength of information. And counterintuitively, the conclusion can be drawn from very little or poor-quality evidence. Read Joseph Cox’s report on what we still don’t know about the origins of the Covid-19 pandemic for VICE.

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