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Supreme Court Decision Could Change Regulatory Process and Put ED Regulations in Jeopardy, Including SAVE Plan and Student Debt Relief

By Maria Carrasco, NASFAA Staff Reporter

The U.S. Supreme Court (SCOTUS) on Friday overturned a decades-long precedent that required federal courts to defer to expert opinions of federal agencies, including on regulations from the Department of Education (ED). Friday’s decision sent shockwaves across the higher education community, with experts saying the decision will be felt by Americans for many years as it relates not only to higher education, but also the environment, public health, and more. 

In a 6-3 decision, split along ideological lines, SCOTUS overturned Chevron U.S.A., Inc. v. Natural Resources Defense Council, known as the “Chevron deference.” The Chevron deference was a 1984 SCOTUS decision that required judges to defer to agencies’ “reasonable” interpretations of “ambiguous” federal laws.

Congress often passes laws that are general and subject to interpretation due to their lack of subject matter expertise. The affected federal agencies, which have the subject matter expertise, are then tasked with developing and implementing regulations.  The logic of the Chevron deference is that the federal agencies have the specific knowledge to make them the best choice to regulate within their interpretation of the law.​​

"Chevron is overruled,” Chief Justice John Roberts wrote. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

Further, Roberts wrote that courts may not defer to an agency interpretation of the law simply because a statute is ambiguous. Roberts added that the decision does not call into question prior cases that “relied on the Chevron framework.”

In her dissent, Justice Elena Kagan wrote that this decision will “roll back agency authority, despite congressional direction to the contrary.” 

“In one fell swoop, the majority today gives itself exclusive power over every open issue — no matter how expertise-driven or policy-laden — involving the meaning of regulatory law,” Kagan wrote. “As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar.”

Adam Minsky, a legal expert and analyst for Forbes, wrote how Friday’s decision could jeopardize the Biden administration’s new income-driven repayment plan, the Saving on a Value Education (SAVE) plan, and its upcoming student loan forgiveness final regulations. On Monday, a pair of federal judges issued separate injunctions that blocked ED from fully implementing the SAVE repayment plan. ED claims that it has the statutory authority to implement SAVE based on non-specific language in the Higher Education Act that authorizes ED to implement income-driven repayment plans

“The Supreme Court’s overruling of Chevron will now make it even more difficult for the Education Department to justify the SAVE plan — and potentially all IDR plans that were derived from the same 1993 statutory authority,” Minsky wrote. “No longer required to defer to agency expertise, federal courts will have a freer hand in applying their own interpretations (and biases) to statutory terminology they deem to be ambiguous. If Congress doesn’t say something as clearly and explicitly in a statute as a court thinks it should have, rather than deferring to the agency in charge of implementing that statute, a judge can impose their own unique view and interpretation.”

Beyond the SAVE repayment plan and student loan forgiveness, this ruling could also have an impact on other regulations from ED, including gainful employment. The Higher Education Act (HEA) of 1965, as amended, defines institutions of higher education, proprietary institutions of higher education, and postsecondary vocational institutions in part as those that prepare students for gainful employment in a recognized occupation. Congress to date has avoided defining gainful employment, leaving the Department of Education, under Chevron deference, free to determine what constitutes gainful employment to ensure that the requirements of the HEA are satisfied. With the latest negotiated rulemaking, GE has been addressed by three consecutive presidential administrations over the course of more than a decade.

Career Education Colleges and Universities (CECU) voiced support for Friday’s decision, saying SCOTUS “has rightly curtailed the ability of federal agencies to exercise wide discretion in interpreting congressional intent.”

“No agency has overreached more in exceeding congressional authority than the current U.S. Department of Education,” CECU CEO Jason Altmire said in a statement. “We are pleased that the Supreme Court has, once and for all, restrained the ability of the ideologically driven bureaucrats in the Department to craft regulations based upon their own whims and biases, rather what Congress had intended.”

Republican lawmakers also celebrated SCOTUS’ decision on Friday, including Sen. Bill Cassidy (La.), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee.

“For too long, Chevron deference has allowed unelected bureaucrats, insulated from political accountability, to exercise power that exceeds their authority,” Cassidy said in a statement. “Today’s Supreme Court decision helps return the role of legislating back to the people’s elected representatives.”

Rep. Bobby Scott (D-Va.), ranking member of the House Committee on Education and the Workforce, voiced his concerns with Friday’s ruling, calling the decision “a wrecking ball to the regulatory systems that have served our country for decades.” Further, Scott said that agency interpretation of vague statutes is necessary to ensure student borrowers are not defrauded.

“Without Chevron deference, we must rely on Congress or the courts to regulate complex policy issues, without the expertise or technical assistance of the agencies that are responsible for implementing the law,” Scott said in a statement. “We are now at greater risk of falling into politicized legal battles wherein bad actors can use the courts to push their own political regulatory agenda.” 

 

Publication Date: 7/1/2024


Armand R | 7/3/2024 12:19:07 PM

Sums it up:
“No agency has overreached more in exceeding congressional authority than the current U.S. Department of Education,” CECU CEO Jason Altmire said in a statement. “We are pleased that the Supreme Court has, once and for all, restrained the ability of the ideologically driven bureaucrats in the Department to craft regulations based upon their own whims and biases, rather what Congress had intended.”
“For too long, Chevron deference has allowed unelected bureaucrats, insulated from political accountability, to exercise power that exceeds their authority,” Cassidy said in a statement.

David J | 7/2/2024 4:46:24 PM

The charge that federal agencies are unelected, bias, and answer to no one is absurd. Federal agencies answer to the president, who is elected via a democratic process, no less democratic than the process that elects Congress, and more democratic than the process that appoints judges. This SCOTUS decision subjects every regulation to the time-consuming process of lawsuits, counter suits, appeals, and more appeals every time one party disagrees with any regulation. And there will always be one party or another that disagrees with any interpretation of statute or regulation. SCOTUS has become so ideological it can't see the forest for the trees, only short-term political gain that will favor them only as long as their party holds office.

Darren C | 7/2/2024 12:58:57 PM

No doubt the Supreme Court, lower courts and all branches of Government are full of bias, political agendas and corruption. That being said, what we have been doing in regards to "deferring to expert opinions of federal agencies" clearly has not been working and ultimately lead up to the giant mess that is the education system as we see it today.

I believe it's worth giving something different a try. I don't realistically expect more positive results however.

Aesha E | 7/1/2024 12:58:57 PM

Wow, what a mess. Does Congress not have the authority to make changes if necessary--isn't that part of the point of technical corrections legislation? Obviously they certainly have the authority to pass new legislation if an agency misinterprets or otherwise issues inappropriate regulation. So who now are the experts to whom an agency is to defer to do their job--or perhaps the idea is that they don't refer to experts and we'll have a variety of ill-informed laws that are not backed by evidence?

Cordell C | 7/1/2024 9:59:46 AM

“For too long, Chevron deference has allowed unelected bureaucrats, insulated from political accountability, to exercise power that exceeds their authority,” Cassidy said in a statement. “Today’s Supreme Court decision helps return the role of legislating back to the people’s elected representatives.”

Is the Supreme Court also not made of unelected bureaucrats, that are even more insulated from political accountability than those in administrative departments?

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