Why Did the Eighth Circuit Halt Educational Debt Cancellation (after Justice Barrett allowed it)?

Steven D. Schwinn, University of Illinois Chicago School of Law

Justice Barrett last week denied an emergency request by a Wisconsin taxpayer association to halt the Biden Administration's program to cancel qualifying student debt. The ruling meant that the Administration could continue to operate the program pending the association's appeal.

Then the Eighth Circuit granted the same emergency relief to Missouri in a parallel case. This ruling halted the program pending appeal.

The two cases raise the same legal claims. District courts in both cases dismissed the cases because the plaintiffs lacked standing. (The Seventh Circuit refused to halt the program while the Wisconsin group appealed.)

So why the difference? Neither Justice Barrett's order nor the Eighth Circuit order contains any legal analysis. So we don't know for sure. But here's a take:

In order to establish standing, a plaintiff has to plausibly allege that they've suffered, or will imminently suffer, a concrete and personal harm, caused by the defendant's actions, and redressible in federal court. Because the harm must be concrete and personal (to the plaintiff), a person or organization cannot establish standing simply because they don't like the way the government is using their taxes. This kind of "generalized taxpayer" harm is too diffuse, and the Court has rejected it as a basis for standing.

The plaintiff in the Wisconsin case is a taxpayer association that unashamedly pleads generalized taxpayer standing. The district court easily rejected standing in that case, and the Seventh Circuit easily declined to halt the Administration's program pending the plaintiff's appeal. Justice Barrett then easily denied the plaintiff's request for emergency relief.

The plaintiff in the Missouri case, in contrast, is the state itself. It asserted standing on behalf of an organization that the state established to service federal loans. The district court ruled that the state didn't have authority to sue on the organization's behalf, and therefore lacked standing. While this seems right (or at least not obviously wrong), it's a closer case than the Wisconsin plaintiff.

That difference may explain the difference in the two preliminary rulings. The Eighth Circuit might've thought that Missouri could establish standing, where Justice Barrett might've seen that the Wisconsin organization couldn't.

But the key word there is "preliminary." No court has yet ruled on the merits. The Administration justifies the debt-cancellation program under the Higher Education Relief Opportunities for Students Act of 2003, which authorizes the Secretary of Education to "waive or modify" terms of federal student loans in an emergency, here COVID-19. The plaintiffs claim in short that the Administration's debt cancellation exceeds the statutory authority, or, if it doesn't, that the statute grants too much discretion in violation of the recently discovered major questions doctrine. Here's the Office of Legal Counsel's opinion on the issue.