How the Biden administration will try to save its student loan relief plan at the Supreme Court

Published

3 years ago

February 26, 2023

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President Biden’s student loan relief plan faces a do-or-die moment on Tuesday as it reaches the Supreme Court for oral arguments.

The up to $20,000 in debt relief that could go to millions of Americans faces two challenges: one from six Republican-led states, Biden v. Nebraska, and another from two student loan borrowers, Department of Education v. Brown.

Biden’s plan to save one of his biggest campaign promises hinges on two arguments.

The administration says that Education Secretary Miguel Cardona had the authority to forgive the debt under the Higher Education Relief Opportunities for Students (HEROES) Act.

But legal observers suggest the closer question could be whether the justices reach the merits at all. The Biden administration contends that neither group of challengers has standing, meaning the legal capacity to sue.

With the lower courts placing the plan on hold, the Biden administration now must face a conservative-majority Supreme Court in its efforts to give borrowers relief.

Here is what you need to know about the legal issues in the two student debt relief cases: What is the HEROES Act?

The Higher Education Relief Opportunities for Students, or HEROES, Act has only recently come back into focus, but it was passed two decades ago with bipartisan support as the country headed to war following the 9/11 terror attacks.

The law gives the education secretary authority to “waive or modify” federal student financial assistance programs “as the Secretary deems necessary in connection with a war or other military operation or national emergency.”

The Trump administration began using HEROES Act authority to pause student loan payments after declaring the coronavirus pandemic a national emergency in 2020.

After Biden took office, his administration extended the emergency and the payment pause before announcing the debt relief plan last year.

The administration has said the HEROES Act’s plain text authorizes Cardona to forgive the debts, and that his decision to do so was reasonable. He has put forward data showing that many borrowers are at risk of defaulting on their loans if the payment pause ends without the debt relief.

“The federal government provides relief to people affected by crises all the time, and that relief flows not just immediately after the crisis, but in the months and years afterwards,” said Jonathan Miller, chief program officer at the Public Rights Project, which filed a brief supporting the administration on behalf of local governments.

“So I think this is a perfectly reasonable and appropriate step for the Secretary to take, given all the information that was before him in the department at the time,” Miller added.

After the Supreme Court took up the challenges, Biden announced the COVID-19 emergency will end in May, but the administration says that doesn’t affect its debt relief plan.

Meanwhile, the administration has argued that ending the emergency moots a separate Supreme Court case involving Title 42, which limits migrants’ ability to seek asylum on public health grounds.

But the White House believes student debt relief is different because it concerns economic consequences that will persist beyond the emergency, rather than stopping the spread of disease, according to people familiar with the administration’s legal strategy.

“Our debt relief plan is needed to prevent defaults and delinquencies as student borrowers transition back to repayment after the end of the payment pause,” an administration official said. “The national emergency formally ending does not change that fact. It also does not change the legal justification for the plan.” How have the courts ruled so far?

Federal appeals courts have blocked the plan in both cases pending further action by the Supreme Court.

In the challenge from the conservative states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — a three-judge panel on the 8th Circuit Court of Appeals, all appointed by Republican presidents, issued a temporary injunction in the fall.

A federal trial judge in Texas ruled in favor of the individual challengers and separately blocked the debt relief plan in November. The 5th U.S. Circuit Court of Appeals later upheld that ruling.

The Biden administration appealed both cases to the Supreme Court, and the justices agreed in December to take up both cases. What do the plan’s opponents say?

Both groups of challengers contend Cardona overstepped his authority under the HEROES Act.

The individual borrowers argue he was required to provide a comment period on the proposal before implementing it.

Both groups argue the debt relief plan invokes the “major questions” doctrine, which requires Congress to speak clearly when authorizing an agency to decide matters of vast economic and political significance.

Echoing a lower court ruling, the plan’s critics assert that taking the administration’s position means the executive branch could cite the pandemic’s lingering effects even 10 years down the road to forgive the debts without consulting Congress.

“This case is not so much about the wisdom of that decision. It’s about in a democratic, self-governing society, how are we going to make these kinds of decisions?” said Casey Mattox, vice president for legal and judicial strategy at Americans for Prosperity, which filed an amicus brief supporting the challengers.

The court has cemented the major questions doctrine in three recent cases: stopping the Centers for Disease and Control and Prevention’s (CDC) eviction freeze during the pandemic, blocking the Biden administration’s vaccine-or-test mandate for large employers and striking down a power plant rule last June.

Thomas Berry, editor-in-chief of “Cato Supreme Court Review” at the Cato Institute, which filed an amicus brief siding with the challengers, said the precedents give a clear indication that a majority of the justices will be skeptical of the debt relief plan.

“If they reach the merits, I would be fairly confident that the action will be struck down,” Berry said. “I think the closer question is whether they reach the merits at all.” Biden admin argues challengers lack standing to sue

The Biden administration believes none of the plaintiffs have standing to challenge the debt relief.

Three states cited economic impacts from how some borrowers are now consolidating their loans, and four said their tax revenues will take a hit.

Missouri shows perhaps the most compelling theory by arguing the plan will harm its student loan service, legal observers say, but the administration is likely to push back that any harm is still speculative.

“I just don’t think it really comports here, because it’s very clear that loan forgiveness ultimately is a net benefit for the states,” said Miller.

His group’s brief argues that forgiveness would make it easier for borrowers to start a business or own a home, spurring economic growth. Republicans request documents from Biden’s Supreme Court commission Appeals court rules North Carolina can’t ban undercover cameras from PETA

The two individual borrowers, who did not qualify for the relief, contend that they can bring their suit because Cardona’s failure to provide a comment period unfairly deprived them of a concrete interest.

The Biden administration asserts stopping the debt relief would not redress their injury, a component needed for standing.

“That judgment leaves Brown’s financial position unchanged; she would still receive no loan forgiveness,” the administration wrote in its brief. “And it would leave Taylor worse off than before; he would receive neither the $10,000 the plan provides nor the $20,000 he purports to seek, but instead nothing at all.”

Business

Nvidia beats revenue expectations in boost to AI investment and US stock markets

Published

1 hour ago

August 28, 2025

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Nvidia beats revenue expectations in boost to AI investment and US stock markets

The world’s most valuable company, and first to be valued at $4trn (£2.9trn), beat market expectations in keenly anticipated financial results.

Microchip maker Nvidia recorded revenues of $46.7bn (£34.6bn) in just three months up to July, latest financial data from the company showed, slightly better than Wall Street observers had expected.

The company’s performance is seen as a bellwether for artificial intelligence (AI) demand, with investors paying close attention to see whether the hype is overblown or if significant investment will pay off.

Originally a creator of gaming graphics hardware, Nvidia’s chips help power AI capability – and the UK’s most powerful supercomputer.

Nvidia’s graphics processors underpin products such as ChatGPT from OpenAI and Gemini from Google.

Other tech giants – Microsoft, Meta and Amazon – make up Nvidia’s biggest customers and are paying large sums to embed AI into their products.

Why does it matter?

Nvidia has been central to the boom in AI development and the surge in tech stock valuations, which has seen stock markets reach record highs.

It represents about 8% of the value of the US S&P 500 stock market index of companies relied on to be stable and profitable.

Strong results will continue to fuel record highs in the market. Conversely, results that fail to live up to the hype could trigger a market tumble.

Nvidia itself saw its share price rise more than 40% over the past year. Its value impacts anyone with cash in the US stock market, such as pension funds.

The S&P 500 rose 14% over the past year, and the tech-company-heavy NASDAQ gained 21%, largely thanks to Nvidia.

As such, its earnings can move markets as much as major economic or monetary policy announcements, like an interest rate decision.

What next?

Revenue rises are forecast to continue to rise as Nvidia said it expected a rise to roughly $54bn (£40bn) in the next three months, more than the $53.14bn (£39.3bn) anticipated by analysts.

This excludes any potential shipments to China as export of Nvidia’s H20 chip, designed with the Biden administration’s export crackdown on advanced AI powering chips in mind, had been banned under US national security grounds.

But in recent weeks, Nvidia and another chipmaker, AMD, reached an unprecedented agreement to pay the Trump administration a 15% portion of China sales in return for export licences to send chips to China.

There were no H20 sales at all to China in the second quarter of the year, the period for which results were released on Wednesday evening.

Previously, 13% of Nvidia’s revenue came from China, with nearly 50% coming from the US.

Market reaction

Despite the expectation-beating results, Nvidia shares were down in after-hours trading, as the massive revenue rises previously booked by the company were not repeated in the latest quarter.

Compared to a year ago, revenues rose 56% and 6% compared to the three months up to April.

The absence of Chinese sales in forecasts appeared to disappoint.

World

Minneapolis: Two children dead and 17 people injured in US school shooting

Published

1 hour ago

August 28, 2025

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Minneapolis: Two children dead and 17 people injured in US school shooting

Two children, aged eight and 10, have been killed in a shooting during mass at a school in Minneapolis.

An attacker opened fire with a rifle through the windows of a church at Annunciation Catholic School and struck a group of children as they sat in pews on Wednesday morning.

The FBI has confirmed the killer has been identified as Robin Westman, a male born as Robert Westman, and is investigating the shooting as an “act of domestic terrorism” and a “hate crime targeting Catholics”.

As it happened: FBI says attack investigated as ‘terrorism’

The city’s police chief Brian O’Hara said the attacker – armed with a rifle, shotgun, and pistol – approached the side of the church and fired dozens of rounds as mass was celebrated during the first week of term.

He added that 17 other people were injured, including 14 children, two of whom were in a critical condition.

Police believe the suspect, thought to be in his early 20s and acting alone, died from a self-inflicted gunshot wound.

Mr O’Hara called the attack in Minnesota a “deliberate act of violence against innocent children and other people worshipping”.

“The sheer cruelty and cowardice of firing into a church full of children is absolutely incomprehensible.”

He also said a wooden plank had been used to barricade some side doors.

Authorities found a smoke bomb but no explosives at the scene, Mr O’Hara said.

Three adults in 80s among those injured

Hennepin Healthcare, the main trauma hospital in Minneapolis, received 11 patients, including nine children – aged six to 14 – and two adults, emergency medicine chair Dr Thomas Wyatt said.

He said four of the patients were taken to operating rooms.

Children’s Minnesota, a paediatric trauma hospital, said in a statement that five children were admitted.

At a later news conference, Mr O’Hara said three adults in their 80s are among those injured in the attack.

He added that Westman had scheduled a manifesto to be released on YouTube, which “appeared to show him at the scene and included some disturbing writings”.

The video has since been taken down with the assistance of the FBI.

‘So much’ gunfire, witness says

Bill Bienemann, a witness to the shooting, told Sky News it went on “for several minutes – a long time for live gunfire”.

“I know what gunfire sounds like, and I was shocked,” he added. “I said there’s no way that could be gunfire, there was so much of it.

“It seemed like a rifle, it certainly didn’t sound like a handgun, so he must have reloaded several times.”

The pre-kindergarten through eighth-grade school had an all-school mass scheduled at 8.15am local time on Wednesday morning (2.15pm UK time), according to its website.

Monday was the first day of the school semester.

Mayor calls shooting ‘unspeakable act’

At the first news conference, Minneapolis mayor Jacob Frey said the shooting was an “unspeakable act”.

“Children are dead,” he said. “There are families that have a deceased child. You cannot put into words the gravity, the tragedy, or the absolute pain of this situation.”

Speaking later, and joined by Governor Tim Walz, Mr Frey said that the “Minneapolis family” has stepped up in “thousands of different ways” after the shooting.

“The way that they acted during the severe threat and danger was nothing short of heroic,” he says.

“This is a tragic and horrible event that should never occur.”

He added: “Anybody who is using this as an opportunity to villainise our trans community or any other community out there has lost their sense of common humanity.”

Mr Walz said: “We often come to these and say these are unspeakable tragedies or there are no words for this, there shouldn’t be words for these types of incidents because they shouldn’t happen.”

The school’s headteacher Matt DeBoer added: “To any of our students and families and staff watching right now, I love you. You’re so brave, and I’m so sorry this happened.”

Senator: Girl ‘had to watch several of her friends get shot’

Speaking to MSNBC, Democratic senator Amy Klobuchar said she had called one of her longtime employees who had three children in the school during the shooting.

The senator described the call with the mother as “one of the most upsetting things I’ve ever heard”.

“These kids are doing an all-school mass and had to watch several of her friends get shot – one in the back, one in the neck,” Ms Klobuchar added.

“And they all got down under the pews and she – her daughter, of course, was not shot – but her daughter ended up being the one to tell one of the dads of one of the other kids that his daughter had been shot.”

Responding to the reports, US President Donald Trump said on Truth Social: “I have been fully briefed on the tragic shooting in Minneapolis, Minnesota.

“The FBI quickly responded and they are on the scene. The White House will continue to monitor this terrible situation.”

US