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(Slip Opinion) OCTOBER TERM, 2022 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES Syllabus BIDEN, PRESIDENT OF THE UNITED STATES, ET AL. v. NEBRASKA ET AL. 1 CERTIORARI BEFORE JUDGMENT TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 22-506. Argued February 28, 2023-Decided June 30, 2023 Title IV of the Higher Education Act of 1965 (Education Act) governs federal financial aid mechanisms, including student loans. 20 U. S. C. §1070(a). The Act authorizes the Secretary of Education to cancel or reduce loans in certain limited circumstances. The Secretary may cancel a set amount of loans held by some public servants, see §§1078-10, 1087j, 1087ee. He may also forgive the loans of borrowers who have died or become “permanently and totally disabled," §1087(a)(1); borrowers who are bankrupt, §1087(b); and borrowers whose schools falsely certify them, close down, or fail to pay lenders. §1087(c). The issue presented in this case is whether the Secretary has authority under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) to depart from the existing provisions of the Education Act and establish a student loan forgiveness program that will cancel about $430 billion in debt principal and affect nearly all borrowers. Under the HEROES Act, the Secretary "may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Education Act] as the Secretary deems necessary in connection with a war or other military operation or national emergency." §1098bb(a)(1). As relevant here, the Secretary may issue such waivers or modifications only "as may be necessary to ensure" that "recipients of student financial assistance under title IV of the [Education Act affected by a national emergency] are not placed in a worse position financially in relation to that financial assistance because of [the national emergency]." §§1098bb(a)(2)(A), 1098ee(2)(C)–(D). In 2022, as the COVID-19 pandemic came to its end, the Secretary

BIDEN U. NEBRASKA Syllabus invoked the HEROES Act to issue "waivers and modifications" reducing or eliminating the federal student debt of most borrowers. Borrowers with eligible federal student loans who had an income below $125,000 in either 2020 or 2021 qualified for a loan balance discharge of up to $10,000. Those who previously received Pell Grants-a specific type of federal student loan based on financial need—qualified for a discharge of up to $20,000. Six States challenged the plan as exceeding the Secretary's statutory authority. The Eighth Circuit issued a nationwide preliminary injunction, and this Court granted certiorari before judgment. Held: 1. At least Missouri has standing to challenge the Secretary's program. Article III requires a plaintiff to have suffered an injury in fact a concrete and imminent harm to a legally protected interest, like property or money-that is fairly traceable to the challenged conduct and likely to be redressed by the lawsuit. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560-561. Here, as the Government concedes, the Secretary's plan would cost MOHELA, a nonprofit government corporation created by Missouri to participate in the student loan market, an estimated $44 million a year in fees. MOHELA is, by law and function, an instrumentality of Missouri: Labeled an "instrumentality" by the State, it was created by the State, is supervised by the State, and serves a public function. The harm to MOHELA in the performance of its public function is necessarily a direct injury to Missouri itself. The Court reached a similar conclusion 70 years ago in Arkansas v. Texas, 346 U. S. 368. The Secretary emphasizes that, as a public corporation, MOHELA has a legal personality separate from the State. But such an instrumentality created and supervised by the State to serve a public function-remains “(for many purposes at least) part of the Government itself." Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 397. The Secretary also contends that because MOHELA can sue on its own behalf, it-not Missouri-must be the one to sue. But where a State has been harmed in carrying out its responsibilities, the fact that it chose to exercise its authority through a public corporation it created and controls does not bar the State from suing to remedy that harm itself. See Arkansas, 346 U. S. 368. With Article III satisfied, the Court need not consider the States' other standing arguments. Pp. 7-12. 2. The HEROES Act allows the Secretary to "waive or modify" existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, but does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal. Pp. 12-26.

Cite as: 600 U. S. Syllabus (a) The text of the HEROES Act does not authorize the Secretary's loan forgiveness program. The Secretary's power under the Act to "modify" does not permit “basic and fundamental changes in the scheme" designed by Congress. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 225. Instead, "modify" carries “a connotation of increment or limitation,” and must be read to mean “to change moderately or in minor fashion.” Ibid. That is how the word is ordinarily used and defined, and the legal definition is no different. (2023) 3 The authority to "modify" statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them. Prior to the COVID-19 pandemic, "modifications" issued under the Act were minor and had limited effect. But the "modifications" challenged here create a novel and fundamentally different loan forgiveness program. While Congress specified in the Education Act a few narrowly delineated situations that could qualify a borrower for loan discharge, the Secretary has extended such discharge to nearly every borrower in the country. It is "highly unlikely that Congress" authorized such a sweeping loan cancellation program "through such a subtle device as permission to ‘modify."" Id., at 231. The Secretary responds that the Act authorizes him to "waive" legal provisions as well as modify them-and that this additional term "grant[s] broader authority" than would "modify" alone. But the Secretary's invocation of the waiver power here does not remotely resemble how it has been used on prior occasions, where it was simply used to nullify particular legal requirements. The Secretary next argues that the power to "waive or modify" is greater than the sum of its parts: Because waiver allows the Secretary "to eliminate legal obligations in their entirety," the combination of "waive or modify" must allow him "to reduce them to any extent short of waiver" (even if the power to "modify" ordinarily does not stretch that far). But the challenged loan forgiveness program goes beyond even that. In essence, the Secretary has drafted a new section of the Education Act from scratch by "waiving" provisions root and branch and then filling the empty space with radically new text. The Secretary also cites a procedural provision in the HEROES Act directing the Secretary to publish a notice in the Federal Register, "includ[ing] the terms and conditions to be applied in lieu of such statutory and regulatory provisions" as the Secretary has waived or modified. §1098bb(b)(2). In the Government's view, that language authorizes both "waiving and then putting [the Secretary's] own requirements in"-a sort of "red penciling" of the existing law. But rather than implicitly granting the Secretary authority to draft new substantive statutory provisions at will, §1098bb(b)(2) simply imposes the

BIDEN U. NEBRASKA Syllabus obligation to report any waivers and modifications he has made. The Secretary's ability to add new terms "in lieu of the old is limited to his authority to "modify" existing law. As with any other modification issued under the Act, no new term or condition reported pursuant to §1098bb(b)(2) may distort the fundamental nature of the provision it alters. In sum, the Secretary's comprehensive debt cancellation plan is not a waiver because it augments and expands existing provisions dramatically. It is not a modification because it constitutes "effectively the introduction of a whole new regime." MCI, 512 U. S., at 234. And it cannot be some combination of the two, because when the Secretary seeks to add to existing law, the fact that he has "waived" certain provisions does not give him a free pass to avoid the limits inherent in the power to "modify." However broad the meaning of "waive or modify," that language cannot authorize the kind of exhaustive rewriting of the statute that has taken place here. Pp. 13-18. (b) The Secretary also appeals to congressional purpose, arguing that Congress intended "to grant substantial discretion to the Secretary to respond to unforeseen emergencies." On this view, the unprecedented nature of the Secretary's debt cancellation plan is justified by the pandemic's unparalleled scope. But the question here is not whether something should be done; it is who has the authority to do it. As in the Court's recent decision in West Virginia v. EPA, given the "history and the breadth of the authority"" asserted by the Executive and the "economic and political significance' of that assertion," the Court has "reason to hesitate before concluding that Congress' meant to confer such authority." 597 U. S. (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159-160). This case implicates many of the factors present in past cases raising similar separation of powers concerns. The Secretary has never previously claimed powers of this magnitude under the HEROES Act; "[n]o regulation premised on" the HEROES Act "has even begun to approach the size or scope" of the Secretary's program. Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U. S. (per curiam). The "economic and political significance"" of the Secretary's action is staggering. West Virginia, 597 U. S., at (quoting Brown & Williamson, 529 U. S., at 160). And the Secretary's assertion of administrative authority has "conveniently enabled [him] to enact a program" that Congress has chosen not to enact itself. West Virginia, 597 U. S., at The Secretary argues that the principles explained in West Virginia and its predecessors should not apply to cases involving government benefits. But major questions cases "have arisen from all corners of the administrative state," id., at and this is not the first such case to arise in the context of government benefits. See King

Cite as: 600 U. S. Syllabus (2023) 5 v. Burwell, 576 U. S. 473, 485. All this leads the Court to conclude that "[t]he basic and consequential tradeoffs" inherent in a mass debt cancellation program "are ones that Congress would likely have intended for itself." West Virginia, 597 U. S., at In such circumstances, the Court has required the Secretary to "point to 'clear congressional authorization"" to justify the challenged program. Id., at (quoting Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324). And as explained, the HEROES Act provides no authorization for the Secretary's plan when examined using the ordinary tools of statutory interpretation-let alone "clear congressional authorization" for such a program. Pp. 19-25. Reversed and remanded. ROBERTS, C. J., delivered the opinion of the Court, in which THOMAS, ALITO, GORSUCH, KAVANAUGH, and BARRETT, JJ., joined. BARRETT, J., filed a concurring opinion. KAGAN, J., filed a dissenting opinion, in which SOTOMAYOR and JACKSON, JJ., joined.

Cite as: 600 U. S. (2023) No. 22-506 Opinion of the Court NOTICE: This opinion is subject to formal revision before publication in the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. Ĉ. 20543, [email protected], of any typographical or other formal errors. SUPREME COURT OF THE UNITED STATES 1 JOSEPH R. BIDEN, PRESIDENT OF THE UNITED STATES, ET AL., PETITIONERS v. NEBRASKA, ET AL. ON WRIT OF CERTIORARI BEFORE JUDGMENT TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT [June 30, 2023] CHIEF JUSTICE ROBERTS delivered the opinion of the Court. To ensure that Americans could keep up with increasing international competition, Congress authorized the first federal student loans in 1958-up to a total of $1,000 per student each year. National Defense Education Act of 1958, 72 Stat. 1584. Outstanding federal student loans now total $1.6 trillion extended to 43 million borrowers. Letter from Congressional Budget Office to Members of Congress, p. 3 (Sept. 26, 2022) (CBO Letter). Last year, the Secretary of Education established the first comprehensive student loan forgiveness program, invoking the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) for authority to do so. The Secretary's plan canceled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600. See ibid.; App. 243. Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.

2 BIDEN v. NEBRASKA Opinion of the Court I A The Higher Education Act of 1965 (Education Act) was enacted to increase educational opportunities and “assist in making available the benefits of postsecondary education to eligible students . . . in institutions of higher education.” 20 U.S. C. §1070(a). To that end, Title IV of the Act restructured federal financial aid mechanisms and established three types of federal student loans. Direct Loans are, as the name suggests, made directly to students and funded by the federal fisc; they constitute the bulk of the Federal Government's student lending efforts. See §1087a et seq. The Government also administers Perkins Loansgovernment-subsidized, low-interest loans made by schools to students with significant financial need—and Federal Family Education Loans, or FFELs—loans made by private lenders and guaranteed by the Federal Government. See §§1071 et seq., 1087aa et seq. While FFELs and Perkins Loans are no longer issued, many remain outstanding. §§1071(d), 1087aa(b). The terms of federal loans are set by law, not the market, so they often come with benefits not offered by private lenders. Such benefits include deferment of any repayment until after graduation, loan qualification regardless of credit history, relatively low fixed interest rates, income-sensitive repayment plans, and―for undergraduate students with financial need—government payment of interest while the borrower is in school. Dept. of Ed., Federal Student Aid, Federal Versus Private Loans. The Education Act specifies in detail the terms and conditions attached to federal loans, including applicable interest rates, loan fees, repayment plans, and consequences of default. See §§1077, 1080, 1087e, 1087dd. It also authorizes the Secretary to cancel or reduce loans, but only in certain limited circumstances and to a particular extent. Specifically, the Secretary can cancel a set amount of loans held

Cite as: 600 U. S. (2023) 3 Opinion of the Court by some public servants-including teachers, members of the Armed Forces, Peace Corps volunteers, law enforcement and corrections officers, firefighters, nurses, and librarians who work in their professions for a minimum number of years. §§1078-10, 1087j, 1087ee. The Secretary can also forgive the loans of borrowers who have died or been “permanently and totally disabled," such that they cannot "engage in any substantial gainful activity." §1087(a)(1). Bankrupt borrowers may have their loans forgiven. §1087(b). And the Secretary is directed to discharge loans for borrowers falsely certified by their schools, borrowers whose schools close down, and borrowers whose schools fail to pay loan proceeds they owe to lenders. §1087(c). Shortly after the September 11 terrorist attacks, Congress became concerned that borrowers affected by the crisis—particularly those who served in the military-would need additional assistance. As a result, it enacted the Higher Education Relief Opportunities for Students Act of 2001. That law provided the Secretary of Education, for a limited period of time, with “specific waiver authority to respond to conditions in the national emergency" caused by the September 11 attacks. 115 Stat. 2386. Rather than allow this grant of authority to expire by its terms at the end of September 2003, Congress passed the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act). 117 Stat. 904. That Act extended the coverage of the 2001 statute to include any war or national emergencynot just the September 11 attacks. By its terms, the Secretary "may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Education Act] as the Secretary deems necessary in connection with a war or other military operation or national emergency." 20 U.S. C.

4 BIDEN v. NEBRASKA Opinion of the Court §1098bb(a)(1).¹ The Secretary may issue waivers or modifications only "as may be necessary to ensure" that "recipients of student financial assistance under title IV of the [Education Act] who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals." §1098bb(a)(2)(A). An "affected individual" is defined, in relevant part, as someone who "resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency” or who "suffered direct economic hardship as a direct result of a war or other military operation or national emergency, as determined by the Secretary." §§1098ee(2)(C)–(D). And a "national emergency” for the purposes of the Act is “a national emergency declared by the President of the United States." §1098ee(4). Immediately following the passage of the Act in 2003, the Secretary issued two dozen waivers and modifications addressing a handful of specific issues. 68 Fed. Reg. 69312– 69318. Among other changes, the Secretary waived the requirement that "affected individuals” must “return or repay an overpayment" of certain grant funds erroneously disbursed by the Government, id., at 69314, and the requirement that public service work must be uninterrupted to qualify an "affected individual" for loan cancellation, id., at 69317. Additional adjustments were made in 2012, with similar limited effects. 77 Fed. Reg. 59311-59318. ¹ Like its 2001 predecessor, the HEROES Act enjoyed virtually unanimous bipartisan support at the time of its enactment, passing by a 421to-1 vote in the House of Representatives and a unanimous voice vote in the Senate. See 149 Cong. Rec. 7952-7953 (2003); id., at 20809; 147 Cong. Rec. 20396 (2001); id., at 26292-26293. The single dissenting Representative later voiced his support for the Act, explaining that he "meant to vote 'yea."" 149 Cong. Rec. 8559 (statement of Rep. Miller).

Cite as: 600 U. S. (2023) 5 Opinion of the Court But the Secretary took more significant action in response to the COVID-19 pandemic. On March 13, 2020, the President declared the pandemic a national emergency. Presidential Proclamation No. 9994, 85 Fed. Reg. 1533715338 (2020). One week later, then-Secretary of Education Betsy DeVos announced that she was suspending loan repayments and interest accrual for all federally held student loans. See Dept. of Ed., Breaking News: Testing Waivers and Student Loan Relief (Mar. 20, 2020). The following week, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act, which required the Secretary to extend the suspensions through the end of September 2020. 134 Stat. 404–405. Before that extension expired, the President directed the Secretary, "[i]n light of the national emergency," to "effectuate appropriate waivers of and modifications to the Education Act to keep the suspensions in effect through the end of the year. 85 Fed. Reg. 49585. And a few months later, the Secretary further extended the suspensions, broadened eligibility for federal financial assistance, and waived certain administrative requirements (to allow, for example, virtual rather than on-site accreditation visits and to extend deadlines for filing reports). Id., at 7985679863; 86 Fed. Reg. 5008–5009 (2021). Over a year and a half passed with no further action beyond keeping the repayment and interest suspensions in place. But in August 2022, a few weeks before President Biden stated that "the pandemic is over," the Department of Education announced that it was once again issuing "waivers and modifications" under the Act this time to reduce and eliminate student debts directly. See App. 257259; Washington Post, Sept. 20, 2022, p. A3, col. 1. During the first year of the pandemic, the Department's Office of General Counsel had issued a memorandum concluding that "the Secretary does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances."

6 BIDEN v. NEBRASKA Opinion of the Court Memorandum from R. Rubinstein to B. DeVos, p. 8 (Jan. 12, 2021). After a change in Presidential administrations and shortly before adoption of the challenged policy, however, the Office of General Counsel "formally rescinded” its earlier legal memorandum and issued a replacement reaching the opposite conclusion. 87 Fed. Reg. 52945 (2022). The new memorandum determined that the HEROES Act "grants the Secretary authority that could be used to effectuate a program of targeted loan cancellation directed at addressing the financial harms of the COVID-19 pandemic.” Id., at 52944. Upon receiving this new opinion, the Secretary issued his proposal to cancel student debt under the HEROES Act. App. 257-259. Two months later, he published the required notice of his "waivers and modifications" in the Federal Register. 87 Fed. Reg. 61512-61514. The terms of the debt cancellation plan are straightforward: For borrowers with an adjusted gross income below $125,000 in either 2020 or 2021 who have eligible federal loans, the Department of Education will discharge the balance of those loans in an amount up to $10,000 per borrower.² Id., at 61514 (“modif[ying] the provisions of” 20 U. S. C. §§1087, 1087dd(g); 34 CFR pt. 647, subpt. D (2022); 34 CFR §§682.402, 685.212). Borrowers who previously received Pell Grants qualify for up to $20,000 in loan cancellation. 87 Fed. Reg. 61514. Eligible loans include "Direct Loans, FFEL loans held by the Department or subject to collection by a guaranty agency, and Perkins Loans held by the Department." Ibid. The Department of Education estimates that about 43 million borrowers qualify for relief, and the Congressional Budget Office estimates that the plan will cancel about $430 billion in debt principal. See App. 119; CBO Letter 3. 2 A borrower filing "jointly or as a Head of Household, or as a qualifying widow(er)," qualifies for loan cancellation with an adjusted gross income lower than $250,000. 87 Fed. Reg. 61514.

Cite as: 600 U. S. (2023) 7 Opinion of the Court B Six States moved for a preliminary injunction, claiming that the plan exceeded the Secretary's statutory authority. The District Court held that none of the States had standing to challenge the plan and dismissed the suit. F. Supp. 3d (ED Mo. 2022). The States appealed, and the Eighth Circuit issued a nationwide preliminary injunction pending resolution of the appeal. The court concluded that Missouri likely had standing through the Missouri Higher Education Loan Authority (MOHELA or Authority), a public corporation that holds and services student loans. 52 F. 4th 1044 (2022). It further concluded that the State's challenge raised “substantial" questions on the merits and that the equities favored maintaining the status quo pending further review. Id., at 1048 (internal quotation marks omitted). With the plan on pause, the Secretary asked this Court vacate the injunction or to grant certiorari before judgment, "to avoid prolonging this uncertainty for the millions of affected borrowers." Application 4. We granted the petition and set the case for expedited argument. 598 U. S. (2022). II Before addressing the legality of the Secretary's program, we must first ensure that the States have standing to challenge it. Under Article III of the Constitution, a plaintiff needs a “personal stake” in the case. TransUnion LLC v. Ramirez, 594 U. S. (2021) (slip op., at 7). That is, the plaintiff must have suffered an injury in fact—a concrete and imminent harm to a legally protected interest, like property or money-that is fairly traceable to the challenged conduct and likely to be redressed by the lawsuit. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560-561 (1992). If at least one plaintiff has standing, the suit may proceed. Rumsfeld v. Forum for Academic and Institutional

8 BIDEN v. NEBRASKA Opinion of the Court Rights, Inc., 547 U. S. 47, 52, n. 2 (2006). Because we conclude that the Secretary's plan harms MOHELA and thereby directly injures Missouri-conferring standing on that State we need not consider the other theories of standing raised by the States. Missouri created MOHELA as a nonprofit government corporation to participate in the student loan market. Mo. Rev. Stat. §173.360 (2016). The Authority owns over $1 billion in FFELS. MOHELA, FY 2022 Financial Statement 9 (Financial Statement). It also services nearly $150 billion worth of federal loans, having been hired by the Department of Education to collect payments and provide customer service to borrowers. Id., at 4, 8. MOHELA receives an administrative fee for each of the five million federal accounts it services, totaling $88.9 million in revenue last year alone. Ibid. Under the Secretary's plan, roughly half of all federal borrowers would have their loans completely discharged. App. 119. MOHELA could no longer service those closed accounts, costing it, by Missouri's estimate, $44 million a year in fees that it otherwise would have earned under its contract with the Department of Education. Brief for Respondents 16. This financial harm is an injury in fact directly traceable to the Secretary's plan, as both the Government and the dissent concede. See Tr. of Oral Arg. 18; post, at 5 (KAGAN, J., dissenting). The plan's harm to MOHELA is also a harm to Missouri. MOHELA is a “public instrumentality” of the State. Mo. Rev. Stat. §173.360. Missouri established the Authority to perform the "essential public function" of helping Missourians access student loans needed to pay for college. Ibid.; see Todd v. Curators of University of Missouri, 347 Mo. 460, 464, 147 S. W. 2d 1063, 1064 (1941) (“Our constitution recognizes higher education as a governmental function."). To fulfill this public purpose, the Authority is empowered by the State to invest in or finance student loans, including by

Cite as: 600 U. S. (2023) 9 Opinion of the Court issuing bonds. §§173.385(1)(6)–(7). It may also service loans and collect "reasonable fees" for doing so. §§173.385(1)(12), (18). Its profits help fund education in Missouri: MOHELA has provided $230 million for development projects at Missouri colleges and universities and almost $300 million in grants and scholarships for Missouri students. Financial Statement 10, 20. The Authority is subject to the State's supervision and control. Its board consists of two state officials and five members appointed by the Governor and approved by the Senate. §173.360. The Governor can remove any board member for cause. Ibid. MOHELA must provide annual financial reports to the Missouri Department of Education, detailing its income, expenditures, and assets. §173.445. The Authority is therefore "directly answerable" to the State. Casualty Reciprocal Exchange v. Missouri Employers Mut. Ins. Co., 956 S. W. 2d 249, 254 (Mo. 1997). The State "set[s] the terms of its existence," and only the State "can abolish [MOHELA] and set the terms of its dissolution." Id., at 254-255. By law and function, MOHELA is an instrumentality of Missouri: It was created by the State to further a public purpose, is governed by state officials and state appointees, reports to the State, and may be dissolved by the State. The Secretary's plan will cut MOHELA's revenues, impairing its efforts to aid Missouri college students. This acknowledged harm to MOHELA in the performance of its public function is necessarily a direct injury to Missouri itself. We came to a similar conclusion 70 years ago in Arkansas v. Texas, 346 U. S. 368 (1953). Arkansas sought to invoke our original jurisdiction in a suit against Texas, claiming that Texas had wrongfully interfered with a contract between the University of Arkansas and a Texas charity. Id., at 369. Texas argued that the suit could not proceed because the University did "not stand in the shoes of the State." Id., at 370. The harm to the University, as Texas

10 BIDEN v. NEBRASKA Opinion of the Court saw it, was not a harm to Arkansas sufficient for the State to sue in its own name. We disagreed. We recognized that “Arkansas must, of course, represent an interest of her own and not merely that of her citizens or corporations." Ibid. But we concluded that Arkansas was in fact seeking to protect its own interests because the University was “an official state instrumentality." Ibid. The State had labeled the University “an instrument of the state in the performance of a governmental work." Ibid. (internal quotation marks omitted). The University served a public purpose, acting as the State's "agen[t] in the educational field." Id., at 371. The University had been “created by the Arkansas legislature," was "governed by a Board of Trustees appointed by the Governor with consent of the Senate,” and “report[ed] all of its expenditures to the legislature.” Id., at 370. In short, the University was an instrumentality of the State, and "any injury under the contract to the University [was] an injury to Arkansas.” Ibid. So too here. Because the Authority is part of Missouri, the State does not seek to "rely on injuries suffered by others." Post, at 2 (opinion of KAGAN, J.). It aims to remedy its own. The Secretary and the dissent assert that MOHELA's injuries should not count as Missouri's because MOHELA, as a public corporation, has a legal personality separate from the State. Every government corporation has such a distinct personality; it is a corporation, after all, “with the powers to hold and sell property and to sue and be sued.” First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611, 624 (1983). Yet such an instrumentality— created and operated to fulfill a public function—nonetheless remains "(for many purposes at least) part of the Government itself." Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 397 (1995). In Lebron, Amtrak was sued for refusing to display a political advertisement on a billboard at one of its stations.

Cite as: 600 U. S. (2023) 11 Opinion of the Court Id., at 376-377. Amtrak argued that it was not subject to the First Amendment because it was a corporation separate from the Federal Government. See id., at 392. Congress had even specified in its authorizing statute that Amtrak was not "an agency or establishment of the United States Government." Id., at 391 (quoting 84 Stat. 1330). Despite this disclaimer, we held that Amtrak remained subject to the First Amendment because it functioned as an instrumentality of the Federal Government, “created by a special statute, explicitly for the furtherance of federal governmental goals" of ensuring that the American public had access to passenger trains. Lebron, 513 U. S., at 397. Its board was appointed by the President, and it had to submit annual reports to the President and Congress. Id., at 385386. Having been "established and organized under federal law for the very purpose of pursuing federal governmental objectives, under the direction and control of federal governmental appointees," Amtrak could not disclaim that it was "part of the Government." Id., at 398, 400. We reiterated the point in Department of Transportation v. Association of American Railroads, 575 U. S. 43 (2015). There, railroads argued that giving Amtrak regulatory power was an unconstitutional delegation of government authority to a private entity. Id., at 49–50. We rejected that contention, noting that "Amtrak was created by the Government, is controlled by the Government, and operates for the Government's benefit." Id., at 53. It was therefore acting "as a governmental entity" in exercising that regulatory power. Id., at 54. That principle holds true here. The Secretary and the dissent contend that because MOHELA can sue on its own behalf, it-not Missouri-must be the one to sue. But in Arkansas, 346 U. S. 368, the University of Arkansas could have asserted its rights under the contract on its own. The University's governing statute made it “a body politic and corporate," with "all the powers of a corporate body," Ark.

12 BIDEN v. NEBRASKA Opinion of the Court Stat. §80-2804 (1887)—including the power to sue and be sued on its own behalf, see HRR Arkansas, Inc. v. River City Contractors, Inc., 350 Ark. 420, 427, 87 S. W. 3d 232, 237 (2002); see, e.g., Board of Trustees, Univ. of Ark. v. Pulaski County, 229 Ark. 370, 315 S. W. 2d 879 (1958). We permitted Arkansas to bring an original suit all the same. Where a State has been harmed in carrying out its responsibilities, the fact that it chose to exercise its authority through a public corporation it created and controls does not bar the State from suing to remedy that harm itself.³ The Secretary's plan harms MOHELA in the performance of its public function and so directly harms the State that created and controls MOHELA. Missouri thus has suffered an injury in fact sufficient to give it standing to challenge the Secretary's plan. With Article III satisfied, we turn to the merits. III The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not. We hold today that the Act allows the Secretary to "waive or modify" existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up. 3 The dissent, for all its attempts to cabin these precedents, cites no precedents of its own addressing a State's standing to sue for a harm to its instrumentality. The dissent offers only a state court case involving a different public corporation, in which the Missouri Supreme Court said that the corporation was separate from the State for the purposes of a state ban on "the lending of the credit of the state." Menorah Medical Center v. Health and Ed. Facilities Auth., 584 S. W. 2d 73, 78 (1979) (plurality opinion). But as the dissent recognizes, a public corporation can count as part of the State for some but not "other purposes." Post, at 11, and n. 1. The Missouri Supreme Court said nothing about, and had no reason to address, whether an injury to that public corporation was a harm to the State.

Cite as: 600 U. S. (2023) 13 Opinion of the Court A The HEROES Act authorizes the Secretary to "waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Education Act] as the Secretary deems necessary in connection with a war or other military operation or national emergency." 20 U. S. C. §1098bb(a)(1). That power has limits. To begin with, statutory permission to "modify" does not authorize “basic and fundamental changes in the scheme" designed by Congress. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 225 (1994). Instead, that term carries “a connotation of increment or limitation," and must be read to mean "to change moderately or in minor fashion." Ibid. That is how the word is ordinarily used. See, e.g., Webster's Third New International Dictionary 1952 (2002) (defining "modify" as "to make more temperate and less extreme," "to limit or restrict the meaning of,” or “to make minor changes in the form or structure of [or] alter without transforming"). The legal definition is no different. Black's Law Dictionary 1203 (11th ed. 2019) (giving the first definition of "modify" as "[t]o make somewhat different; to make small changes to,” and the second as “[t]o make more moderate or less sweeping"). The authority to "modify" statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them. The Secretary's previous invocations of the HEROES Act illustrate this point. Prior to the COVID-19 pandemic, "modifications" issued under the Act implemented only minor changes, most of which were procedural. Examples include reducing the number of tax forms borrowers are required to file, extending time periods in which borrowers must take certain actions, and allowing oral rather than written authorizations. See 68 Fed. Reg. 69314-69316. Here, the Secretary purported to "modif[y] the provisions of" two statutory sections and three related regulations

14 BIDEN v. NEBRASKA Opinion of the Court governing student loans. 87 Fed. Reg. 61514. The affected statutory provisions granted the Secretary the power to "discharge [a] borrower's liability,” or pay the remaining principal on a loan, under certain narrowly prescribed circumstances. 20 U. S. C. §§1087, 1087dd(g)(1). Those circumstances were limited to a borrower's death, disability, or bankruptcy; a school's false certification of a borrower or failure to refund loan proceeds as required by law; and a borrower's inability to complete an educational program due to closure of the school. See §§1087(a)–(d), 1087dd(g). The corresponding regulatory provisions detailed rules and procedures for such discharges. They also defined the terms of the Government's public service loan forgiveness program and provided for discharges when schools commit malfeasance. See 34 CFR §§682.402, 685.212; 34 CFR pt. 674, subpt. D. The Secretary's new “modifications" of these provisions were not "moderate" or "minor." Instead, they created a novel and fundamentally different loan forgiveness program. The new program vests authority in the Department Education to discharge up to $10,000 for every borrower with income below $125,000 and up to $20,000 for every such borrower who has received a Pell Grant. 87 Fed. Reg. 61514. No prior limitation on loan forgiveness is left standing. Instead, every borrower within the specified income cap automatically qualifies for debt cancellation, no matter their circumstances. The Department of Education estimates that the program will cover 98.5% of all borrowers. See Dept. of Ed., White House Fact Sheet: The Biden Administration's Plan for Student Debt Relief Could Benefit Tens of Millions of Borrowers in All Fifty States (Sept. 20, 2022). From a few narrowly delineated situations specified by Congress, the Secretary has expanded forgiveness to nearly every borrower in the country. The Secretary's plan has "modified" the cited provisions

Cite as: 600 U. S. (2023) 15 Opinion of the Court only in the same sense that "the French Revolution 'modified' the status of the French nobility"—it has abolished them and supplanted them with a new regime entirely. MCI, 512 U. S., at 228. Congress opted to make debt forgiveness available only in a few particular exigent circumstances; the power to modify does not permit the Secretary to "convert that approach into its opposite" by creating a new program affecting 43 million Americans and $430 billion in federal debt. Descamps v. United States, 570 U. S. 254, 274 (2013). Labeling the Secretary's plan a mere “modification" does not lessen its effect, which is in essence to allow the Secretary unfettered discretion to cancel student loans. It is "highly unlikely that Congress" authorized such a sweeping loan cancellation program “through such a subtle device as permission to 'modify.”” MCI, 512 U. S., at 231. The Secretary responds that the Act authorizes him to "waive" legal provisions as well as modify them and that this additional term “grant[s] broader authority” than would "modify" alone. But the Secretary's invocation of the waiver power here does not remotely resemble how it has been used on prior occasions. Previously, waiver under the HEROES Act was straightforward: the Secretary identified a particular legal requirement and waived it, making compliance no longer necessary. For instance, on one occasion the Secretary waived the requirement that a student provide a written request for a leave of absence. See 77 Fed. Reg. 59314. On another, he waived the regulatory provisions requiring schools and guaranty agencies to attempt collection of defaulted loans for the time period in which students were affected individuals. See 68 Fed. Reg. 69316. Here, the Secretary does not identify any provision that he is actually waiving.4 No specific provision of the Educa 4 While the Secretary's notice published in the Federal Register refers

16 BIDEN v. NEBRASKA Opinion of the Court tion Act establishes an obligation on the part of student borrowers to pay back the Government. So as the Government concedes, "waiver”—as used in the HEROES Act-cannot refer to "waiv[ing] loan balances” or “waiving the obligation to repay" on the part of a borrower. Tr. of Oral Arg. 9, 64. Contrast 20 U. S. C. §1091b(b)(2)(D) (allowing the Secretary to "waive the amounts that students are required to return" in specified circumstances of overpayment by the Government). Because the Secretary cannot waive a particular provision or provisions to achieve the desired result, he is forced to take a more circuitous approach, one that avoids any need to show compliance with the statutory limitation on his authority. He simply "waiv[es] the elements of the discharge and cancellation provisions that are inapplicable in this [debt cancellation] program that would limit eligibility to other contexts." Tr. of Oral Arg. 64–65. Yet even that expansive conception of waiver cannot justify the Secretary's plan, which does far more than relax existing legal requirements. The plan specifies particular sums to be forgiven and income-based eligibility requirements. The addition of these new and substantially different provisions cannot be said to be a "waiver" of the old in any meaningful sense. Recognizing this, the Secretary acknowledges that waiver alone is not enough; after waiving whatever “inapplicable” law would bar his debt cancellation plan, he says, he then “modif[ied] the provisions to bring [them] in line with this program.” Id., at 65. So in the end, the Secretary's plan relies on modifications all the way down. And as we have explained, the word "modify" simply cannot bear that load. The Secretary and the dissent go on to argue that the power to "waive or modify" is greater than the sum of its to "waivers and modifications" generally, see 87 Fed. Reg. 61512-61514, and while two sentences use the somewhat ambiguous phrase "[t]his waiver," id., at 61514, the notice identifies no specific legal provision as having been "waived" by the Secretary.

Cite as: 600 U. S. (2023) 17 Opinion of the Court parts. Because waiver allows the Secretary “to eliminate legal obligations in their entirety,” the argument runs, the combination of "waive or modify" allows him "to reduce them to any extent short of waiver"-even if the power to "modify" ordinarily does not stretch that far. Reply Brief 16-17 (internal quotation marks omitted). But the Secretary's program cannot be justified by such sleight of hand. The Secretary has not truly waived or modified the provisions in the Education Act authorizing specific and limited forgiveness of student loans. Those provisions remain safely intact in the U. S. Code, where they continue to operate in full force. What the Secretary has actually done is draft a new section of the Education Act from scratch by "waiving" provisions root and branch and then filling the empty space with radically new text. Lastly, the Secretary points to a procedural provision in the HEROES Act. The Act directs the Secretary to publish a notice in the Federal Register “includ[ing] the terms and conditions to be applied in lieu of such statutory and regulatory provisions" as the Secretary has waived or modified. 20 U. S. C. §1098bb(b)(2) (emphasis added). In the Secretary's view, that language authorizes "both deleting and then adding back in, waiving and then putting his own requirements in”– —a sort of “red penciling" of the existing law. Tr. of Oral Arg. 65; see also Reply Brief 17. Section 1098bb(b)(2) is, however, "a wafer-thin reed on which to rest such sweeping power." Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U.S. (2021) (per curiam) (slip op., at 7). The provision is no more than it appears to be: a humdrum reporting requirement. Rather than implicitly granting the Secretary authority to draft new substantive statutory provisions at will, it simply imposes the obligation to report any waivers and modifications he has made. Section 1098bb(b)(2) suggests that "waivers and modifications" includes addi

18 BIDEN v. NEBRASKA Opinion of the Court tions. The dissent accordingly reads the statute as authorizing any degree of change or any new addition, “from modest to substantial”—and nothing in the dissent's analysis suggests stopping at "substantial." Post, at 20. Because the Secretary "does not have to leave gaping holes" when he waives provisions, the argument runs, it follows that any replacement terms the Secretary uses to fill those holes must be lawful. Ibid. But the Secretary's ability to add new terms “in lieu of" the old is limited to his authority to "modify" existing law. As with any other modification issued under the Act, no new term or condition reported pursuant to §1098bb(b)(2) may distort the fundamental nature of the provision it alters.5 The Secretary's comprehensive debt cancellation plan cannot fairly be called a waiver-it not only nullifies existing provisions, but augments and expands them dramatically. It cannot be mere modification, because it constitutes "effectively the introduction of a whole new regime." MCI, 512 U. S., at 234. And it cannot be some combination of the two, because when the Secretary seeks to add to existing law, the fact that he has “waived” certain provisions does not give him a free pass to avoid the limits inherent in the power to "modify." However broad the meaning of “waive or modify," that language cannot authorize the kind of exhaustive rewriting of the statute that has taken place here.6 5 The dissent asserts that our decision today will control any challenge to the Secretary's temporary suspensions of loan repayments and interest accrual. Post, at 21-22. We decide only the case before us. A challenge to the suspensions may involve different considerations with respect to both standing and the merits. 6 The States further contend that the Secretary's program violates the requirement in the HEROES Act that any waivers or modifications be "necessary to ensure that ... affected individuals are not placed in a worse position financially in relation to" federal financial assistance. 20 U.S. C. §1098bb(a)(2)(A); see Brief for Respondents 39-44. While our decision does not rest upon that reasoning, we note that the Secretary

Cite as: 600 U. S. (2023) 19 Opinion of the Court B In a final bid to elide the statutory text, the Secretary appeals to congressional purpose. "The whole point of” the HEROES Act, the Government contends, “is to ensure that in the face of a national emergency that is causing financial harm to borrowers, the Secretary can do something." Tr. of Oral Arg. 55. And that “something” was left deliberately vague because Congress intended "to grant substantial discretion to the Secretary to respond to unforeseen emergencies." Reply Brief 22, n. 3. So the unprecedented nature of the Secretary's debt cancellation plan only “reflects the pandemic's unparalleled scope." Brief for Petitioners 52 (Brief for United States). The dissent agrees. "Emergencies, after all, are emergencies," it reasons, and “more serious measures" must be expected "in response to more serious problems." Post, at 25, 28. The dissent's interpretation of the HEROES Act would grant unlimited power to the Secretary, not only to modify or waive certain provisions but to "fill the holes that action creates with new terms" no matter how drastic those terms might be—and to “alter [provisions] to the extent [he] think[s] appropriate,” up to and including “the most substantial kind of change” imaginable. Post, at 16, 19-20. That is inconsistent with the statutory language and past practice under the statute. The question here is not whether something should be done; it is who has the authority to do it. Our recent decision in West Virginia v. EPA involved similar concerns over the exercise of administrative power. 597 U. S. (2022). That case involved the EPA's claim that the Clean Air Act authorized it to impose a nationwide cap on carbon dioxide faces a daunting task in showing that cancellation of debt principal is "necessary to ensure" that borrowers are not placed in "worse position[s] financially in relation to" their loans, especially given the Government's prior determination that pausing interest accrual and loan repayments would achieve that end.

20 BIDEN v. NEBRASKA Opinion of the Court emissions. Given "the history and the breadth of the authority that [the agency] ha[d] asserted,' and the 'economic and political significance' of that assertion,” we found that there was 'reason to hesitate before concluding that Congress' meant to confer such authority." Id., at (slip op., at 17) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159–160 (2000); first alteration in original). So too here, where the Secretary of Education claims the authority, on his own, to release 43 million borrowers from their obligations to repay $430 billion in student loans. The Secretary has never previously claimed powers of this magnitude under the HEROES Act. As we have already noted, past waivers and modifications issued under the Act have been extremely modest and narrow in scope. The Act has been used only once before to waive or modify a provision related to debt cancellation: In 2003, the Secretary waived the requirement that borrowers seeking loan forgiveness under the Education Act's public service discharge provisions "perform uninterrupted, otherwise qualifying service for a specified length of time (for example, one year) or for consecutive periods of time, such as 5 consecutive years." 68 Fed. Reg. 69317. That waiver simply eased the requirement that service be uninterrupted to qualify for the public service loan forgiveness program. In sum, “[n]o regulation premised on" the HEROES Act “has even begun to approach the size or scope" of the Secretary's program. Alabama Assn., 594 U. S., at (slip op., at 7).7 Under the Government's reading of the HEROES Act, the 66 7 The Secretary also cites a prior invocation of the HEROES Act waiving the requirement that borrowers must repay prior overpayments of certain grant funds. See Brief for United States 41; 68 Fed. Reg. 69314. But Congress had already limited borrower liability in such cases to exclude overpayments in amounts up to "50 percent of the total grant assistance received by the student" for the period at issue, so the Secretary's waiver had only a modest effect. 20 U. S. C. §1091b(b)(2)(C)(i)(II). And that waiver simply held the Government responsible for its own errors when it had mistakenly disbursed undeserved grant funds.

Cite as: 600 U. S. (2023) 21 Opinion of the Court Secretary would enjoy virtually unlimited power to rewrite the Education Act. This would "effec[t] a fundamental revision of the statute, changing it from [one sort of] scheme of ... regulation' into an entirely different kind,” West Virginia, 597 U. S., at (slip op., at 24) (quoting MCI, 512 U. S., at 231) one in which the Secretary may unilaterally define every aspect of federal student financial aid, provided he determines that recipients have "suffered direct economic hardship as a direct result of a . . . national emergency." 20 U. S. C. §1098ee(2)(D). The "economic and political significance”” of the Secretary's action is staggering by any measure. West Virginia, 597 U. S., at (slip op., at 17) (quoting Brown & Williamson, 529 U. S., at 160). Practically every student borrower benefits, regardless of circumstances. A budget model issued by the Wharton School of the University of Pennsylvania estimates that the program will cost taxpayers "between $469 billion and $519 billion," depending on the total number of borrowers ultimately covered. App. 108. That is ten times the "economic impact" that we found significant in concluding that an eviction moratorium implemented by the Centers for Disease Control and Prevention triggered analysis under the major questions doctrine. Alabama Assn., 594 U. S., at (slip op., at 6). It amounts to nearly one-third of the Government's $1.7 trillion in annual discretionary spending. Congressional Budget Office, The Federal Budget in Fiscal Year 2022. There is no serious dispute that the Secretary claims the authority to exercise control over "a significant portion of the American economy." Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324 (2014) (quoting Brown & Williamson, 529 U. S., at 159). The dissent is correct that this is a case about one branch of government arrogating to itself power belonging to another. But it is the Executive seizing the power of the Legislature. The Secretary's assertion of administrative authority has "conveniently enabled [him] to enact a program"

22 BIDEN v. NEBRASKA Opinion of the Court that Congress has chosen not to enact itself. West Virginia, 597 U. S., at (slip op., at 27). Congress is not unaware of the challenges facing student borrowers. "More than 80 student loan forgiveness bills and other student loan legislation" were considered by Congress during its 116th session alone. M. Kantrowitz, Year in Review: Student Loan Forgiveness Legislation, Forbes, Dec. 24, 2020.8 And the discussion is not confined to the halls of Congress. Student loan cancellation "raises questions that are personal and emotionally charged, hitting fundamental issues about the structure of the economy." J. Stein, Biden Student Debt Plan Fuels Broader Debate Over Forgiving Borrowers, Washington Post, Aug. 31, 2022. The sharp debates generated by the Secretary's extraordinary program stand in stark contrast to the unanimity with which Congress passed the HEROES Act. The dissent asks us to "[i]magine asking the enacting Congress: Can the Secretary use his powers to give borrowers more relief when an emergency has inflicted greater harm?" Post, at 27-28. The dissent "can't believe" the answer would be no. Post, at 28. But imagine instead asking the enacting Congress a more pertinent question: "Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?" We can't believe the answer would be yes. Congress did not unanimously pass the HEROES Act with such power in mind. "A decision of such magnitude and consequence” on a matter of “earnest and profound debate across the country"" must "res[t] with Congress itself, or an agency acting pursuant to a clear delegation from that representative body." West Virginia, 597 U. S., at (slip op., at 28, 31) (quoting Gonzales 8 Resolutions were also introduced in 2020 and 2021 “[c]alling on the President ... to take executive action to broadly cancel Federal student loan debt." See S. Res. 711, 116th Cong., 2d Sess. (2020); S. Res. 46, 117th Cong., 1st Sess. (2021). Those resolutions failed to reach a vote.

Cite as: 600 U. S. (2023) 23 Opinion of the Court v. Oregon, 546 U. S. 243, 267-268 (2006)). As then-Speaker of the House Nancy Pelosi explained: “People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress." Press Conference, Office of the Speaker of the House (July 28, 2021). Aside from reiterating its interpretation of the statute, the dissent offers little to rebut our conclusion that "indicators from our previous major questions cases are present” here. Post, at 15 (BARRETT, J., concurring). The dissent insists that "[s]tudent loans are in the Secretary's wheelhouse." Post, at 26 (opinion of KAGAN, J.). But in light of the sweeping and unprecedented impact of the Secretary's loan forgiveness program, it would seem more accurate to describe the program as being in the "wheelhouse" of the House and Senate Committees on Appropriations. Rather than dispute the extent of that impact, the dissent chooses to mount a frontal assault on what it styles "the Court's made-up major questions doctrine." Post, at 29-30. But its attempt to relitigate West Virginia is misplaced. As we explained in that case, while the major questions “label” may be relatively recent, it refers to “an identifiable body of law that has developed over a series of significant cases” spanning decades. West Virginia, 597 U. S., at (slip op., at 20). At any rate, "the issue now is not whether [West Virginia] is correct. The question is whether that case is distinguishable from this one. And it is not." Collins v. Yellen, 594 U.S. (2021) (KAGAN, J., concurring in part and concurring in judgment) (slip op., at 2). The Secretary, for his part, acknowledges that West Virginia is the law. Brief for United States 47-48. But he objects that its principles apply only in cases concerning "agency action[s] involv[ing] the power to regulate, not the

24 BIDEN v. NEBRASKA Opinion of the Court provision of government benefits." Reply Brief 21. In the Government's view, "there are fewer reasons to be concerned" in cases involving benefits, which do not impose "profound burdens" on individual rights or cause “regulatory effects that might prompt a note of caution in other contexts involving exercises of emergency powers." Tr. of Oral Arg. 61. This Court has never drawn the line the Secretary suggests and for good reason. Among Congress's most important authorities is its control of the purse. U. S. Const., Art. I, §9, cl. 7; see also Office of Personnel Management v. Richmond, 496 U. S. 414, 427 (1990) (the Appropriations Clause is "a most useful and salutary check upon profusion and extravagance" (internal quotation marks omitted)). It would be odd to think that separation of powers concerns evaporate simply because the Government is providing monetary benefits rather than imposing obligations. As we observed in West Virginia, experience shows that major questions cases "have arisen from all corners of the administrative state,” and administrative action resulting in the conferral of benefits is no exception to that rule. 597 U. S., at (slip op., at 17). In King v. Burwell, 576 U. S. 473 (2015), we declined to defer to the Internal Revenue Service's interpretation of a healthcare statute, explaining that the provision at issue affected "billions of dollars of spending each year and ... the price of health insurance for millions of people." Id., at 485. Because the interpretation of the provision was "a question of deep 'economic and political significance' that is central to [the] statutory scheme," we said, we would not assume that Congress entrusted that task to an agency without a clear statement to that effect. Ibid. (quoting Utility Air, 573 U. S., at 324). That the statute at issue involved government benefits made no difference in King, and it makes no difference here. All this leads us to conclude that “[t]he basic and consequential tradeoffs" inherent in a mass debt cancellation

Cite as: 600 U. S. * Opinion of the Court program "are ones that Congress would likely have intended for itself." West Virginia, 597 U. S., at (slip op., at 26). In such circumstances, we have required the Secretary to "point to 'clear congressional authorization"" to justify the challenged program. Id., at (slip op., at 19, 28) (quoting Utility Air, 573 U. S., at 324). And as we have already shown, the HEROES Act provides no authorization for the Secretary's plan even when examined using the ordinary tools of statutory interpretation—let alone “clear congressional authorization” for such a program.⁹ (2023) * - 25 It has become a disturbing feature of some recent opinions to criticize the decisions with which they disagree as going beyond the proper role of the judiciary. Today, we have concluded that an instrumentality created by Missouri, governed by Missouri, and answerable to Missouri is indeed part of Missouri; that the words "waive or modify" do not mean “completely rewrite"; and that our precedent— old and new-requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy. We have employed the traditional tools of judicial decisionmaking in doing so. Reasonable minds may disagree with our analysis in fact, at least three do. See post, p. (KAGAN, J., dissenting). We do ⁹ The dissent complains that our application of the major questions doctrine is a "tell" revealing that "normal' statutory interpretation cannot sustain [our] decision." Post, at 23, 30. Not so. As we have explained, the statutory text alone precludes the Secretary's program. Today's opinion simply reflects this Court's familiar practice of providing multiple grounds to support its conclusions. See, e.g., Kucana v. Holder, 558 U. S. 233, 243-252 (2010) (interpreting the text of a federal immigration statute in the first instance, then citing the “presumption favoring judicial review of administrative action" as an additional sufficient basis for the Court's decision). The fact that multiple grounds support a result is usually regarded as a strength, not a weakness.

26 BIDEN v. NEBRASKA Opinion of the Court not mistake this plainly heartfelt disagreement for disparagement. It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country. The judgment of the District Court for the Eastern District of Missouri is reversed, and the case is remanded for further proceedings consistent with this opinion. The Government's application to vacate the Eighth Circuit's injunction is denied as moot. It is so ordered.

Cite as: 600 U. S. (2023) No. 22-506 BARRETT, J., concurring SUPREME COURT OF THE UNITED STATES 1 JOSEPH R. BIDEN, PRESIDENT OF THE UNITED STATES, ET AL., PETITIONERS U. NEBRASKA, ET AL. ON WRIT OF CERTIORARI BEFORE JUDGMENT TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT [June 30, 2023] JUSTICE BARRETT, concurring. I join the Court's opinion in full. I write separately to address the States' argument that, under the "major questions doctrine," we can uphold the Secretary of Education's loan cancellation program only if he points to "“clear congressional authorization”” for it. West Virginia v. EPA, 597 U.S. (2022) (slip op., at 19). In this case, the Court applies the ordinary tools of statutory interpretation to conclude that the HEROES Act does not authorize the Secretary's plan. Ante, at 12-18. The major questions doctrine reinforces that conclusion but is not necessary to it. Ante, at 25. Still, the parties have devoted significant attention to the major questions doctrine, and there is an ongoing debate about its source and status. I take seriously the charge that the doctrine is inconsistent with textualism. West Virginia, 597 U. S., at (KAGAN, J., dissenting) (slip op., at 28) ("When [textualism] would frustrate broader goals, special canons like the ‘major questions doctrine' magically appear as get-out-of-text-free cards”). And I grant that some articulations of the major questions doctrine on offer—most notably, that the doctrine is a substantive canon-should give a textualist pause. Yet for the reasons that follow, I do not see the major

2 BIDEN v. NEBRASKA BARRETT, J., concurring questions doctrine that way. Rather, I understand it to emphasize the importance of context when a court interprets a delegation to an administrative agency. Seen in this light, the major questions doctrine is a tool for discerning—not departing from—the text's most natural interpretation. I A Substantive canons are rules of construction that advance values external to a statute.¹ A. Barrett, Substantive Canons and Faithful Agency, 90 B. U. L. Rev. 109, 117 (2010) (Barrett). Some substantive canons, like the rule of lenity, play the modest role of breaking a tie between equally plausible interpretations of a statute. United States v. Santos, 553 U. S. 507, 514 (2008) (plurality opinion). Others are more aggressive think of them as strong-form substantive canons. Unlike a tie-breaking rule, a strongform canon counsels a court to strain statutory text to advance a particular value. Barrett 168. There are many such canons on the books, including constitutional avoidance, the clear-statement federalism rules, and the presumption against retroactivity. Id., at 138-145, 172–173. Such rules effectively impose a “clarity tax” on Congress by demanding that it speak unequivocally if it wants to accomplish certain ends. J. Manning, Clear Statement Rules and the Constitution, 110 Colum. L. Rev. 399, 403 (2010). This "clear statement” requirement means that the better interpretation of a statute will not necessarily prevail. E.g., Boechler v. Commissioner, 596 U. S. (2022) (slip op., at 6) (“[I]n this context, better is not enough”). Instead, if 1They stand in contrast to linguistic or descriptive canons, which are designed to reflect grammatical rules (such as the punctuation canon) or speech patterns (like the inclusion of some things implies the exclusion of others). A. Barrett, Substantive Canons and Faithful Agency, 90 B. U. L. Rev. 109, 117 (2010).

Cite as: 600 U. S. (2023) 3 BARRETT, J., concurring the better reading leads to a disfavored result (like provoking a serious constitutional question), the court will adopt an inferior-but-tenable reading to avoid it. So to achieve an end protected by a strong-form canon, Congress must close all plausible off ramps. While many strong-form canons have a long historical pedigree, they are “in significant tension with textualism" insofar as they instruct a court to adopt something other than the statute's most natural meaning. Barrett 123–124. The usual textualist enterprise involves "hear[ing] the words as they would sound in the mind of a skilled, objectively reasonable user of words." F. Easterbrook, The Role of Original Intent in Statutory Construction, 11 Harv. J. L. & Pub. Pol'y 59, 65 (1988). But a strong-form canon "load[s] the dice for or against a particular result” in order to serve a value that the judiciary has chosen to specially protect. A. Scalia, A Matter of Interpretation 27 (1997) (Scalia); see also Barrett 124, 168–169. Even if the judiciary's adoption of such canons can be reconciled with the Constitution, ²2 it is undeniable that they pose "a lot of trouble" for “the honest textualist." Scalia 28. 2 Whether the creation or application of strong-form canons exceeds the "judicial Power" conferred by Article III is a difficult question. On the one hand, "federal courts have been developing and applying [such] canons for as long as they have been interpreting statutes," and that is some reason to regard the practice as consistent with the original understanding of the "judicial Power." Barrett 155, 176. Moreover, many strongform canons advance constitutional values, which heightens their claim to legitimacy. Id., at 168–170. On the other hand, these canons advance constitutional values by imposing prophylactic constraints on Congress and that is in tension with the Constitution's structure. Id., at 174, 176. Thus, even assuming that the federal courts have not overstepped by adopting such canons in the past, I am wary of adopting new ones and if the major questions doctrine were a newly minted strongform canon, I would not embrace it. In my view, however, the major questions doctrine is neither new nor a strong-form canon.

4 BIDEN v. NEBRASKA BARRETT, J., concurring B Some have characterized the major questions doctrine as a strong-form substantive canon designed to enforce Article I's Vesting Clause. See, e.g., C. Sunstein, There Are Two "Major Questions" Doctrines, 73 Admin. L. Rev. 475, 483– 484 (2021) (asserting that recent cases apply the major questions doctrine as “a nondelegation canon”); L. Heinzerling, The Power Canons, 58 Wm. & Mary L. Rev. 1933, 1946-1948 (2017) (describing the major questions doctrine as a “normative” canon that “is both a presumption against certain kinds of agency interpretations and an instruction to Congress"). On this view, the Court overprotects the nondelegation principle by increasing the cost of delegating authority to agencies—namely, by requiring Congress to speak unequivocally in order to grant them significant rulemaking power. See Barrett 172-176; see also post, at 27 (KAGAN, J., dissenting) (describing the major questions doctrine as a “heightened-specificity requirement"); Georgia v. President of the United States, 46 F. 4th 1283, 1314 (CA11 2022) (Anderson, J., concurring in part and dissenting in part) (“[T]he major questions doctrine is essentially a clearstatement rule"). This "clarity tax" might prevent Congress from getting too close to the nondelegation line, especially since the “intelligible principle” test largely leaves Congress to self-police. (So the doctrine would function like constitutional avoidance.) In addition or instead, the doctrine might reflect the judgment that it is so important for Congress to exercise "[a]ll legislative Powers," Art. I, §1, that it should be forced to think twice before delegating substantial discretion to agencies even if the delegation is well within Congress's power to make. (So the doctrine would function like the rule that Congress must speak clearly to abrogate state sovereign immunity.) No matter which rationale justifies it, this “clear statement" version of the major questions doctrine "loads the dice" so that a plausible

Cite as: 600 U. S. (2023) 5 BARRETT, J., concurring antidelegation interpretation wins even if the agency's interpretation is better. While one could walk away from our major questions cases with this impression, I do not read them this way. No doubt, many of our cases express an expectation of "clear congressional authorization” to support sweeping agency action. See, e.g., West Virginia, 597 U. S., at (slip op., -> at 19); Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324 (2014); see also Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U. S. (2021) (per curiam) (slip op., at 6). But none requires “an ‘unequivocal declaration"" from Congress authorizing the precise agency action under review, as our clear-statement cases do in their respective domains. See Financial Oversight and Management Bd. for P. R. v. Centro De Periodismo Investigativo, Inc., 598 U. S. (2023) (slip op., at 6). And none purports to depart from the best interpretation of the text the hallmark of a true clear-statement rule. So what work is the major questions doctrine doing in these cases? I will give you the long answer, but here is the short one: The doctrine serves as an interpretive tool reflecting "common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency." FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 133 (2000). II The major questions doctrine situates text in context, which is how textualists, like all interpreters, approach the task at hand. C. Nelson, What Is Textualism? 91 Va. L. Rev. 347, 348 (2005) (“[N]o 'textualist' favors isolating statutory language from its surrounding context”); Scalia 37 (“In textual interpretation, context is everything”). After all, the meaning of a word depends on the circumstances in which it is used. J. Manning, The Absurdity Doctrine, 116

6 BIDEN v. NEBRASKA BARRETT, J., concurring Harv. L. Rev. 2387, 2457 (2003) (Manning). To strip a word from its context is to strip that word of its meaning. Context is not found exclusively "within the four corners' a statute." Id., at 2456. Background legal conventions, for instance, are part of the statute's context. F. Easterbrook, The Case of the Speluncean Explorers: Revisited, 112 Harv. L. Rev. 1876, 1913 (1999) (“Language takes meaning from its linguistic context," as well as "historical and governmental contexts"). Thus, courts apply a presumption of mens rea to criminal statutes, Xiulu Ruan v. United States, 597 U. S. (2022) (slip op., at 5), and a presumption of equitable tolling to statutes of limitations, Irwin v. Department of Veterans Affairs, 498 U. S. 89, 95– 96 (1990). It is also well established that "[w]here Congress employs a term of art obviously transplanted from another legal source, it brings the old soil with it." George v. McDonough, 596 U. S. (2022) (slip op., at 5) (internal quotation marks omitted). I could go on. See, e.g., Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U. S. 118, 132 (2014) (federal causes of action are construed "to incorporate a requirement of proximate causation"); Wisconsin Dept. of Revenue v. William Wrigley, Jr., Co., 505 U. S. 214, 231 (1992) (“de minimis non curat lex"). As it happens, "[t]he notion that some things go without saying' applies to legislation just as it does to everyday life." Bond v. United States, 572 U. S. 844, 857 (2014). O Context also includes common sense, which is another thing that “goes without saying." Case reporters and casebooks brim with illustrations of why literalism the antithesis of context-driven interpretation—falls short. Consider the classic example of a statute imposing criminal penalties on "whoever drew blood in the streets."" United States v. Kirby, 7 Wall. 482, 487 (1869). Read literally, the statute would cover a surgeon accessing a vein of a person in the street. But "common sense" counsels otherwise, ibid., be

Cite as: 600 U. S. (2023) 7 BARRETT, J., concurring cause in the context of the criminal code, a reasonable observer would "expect the term 'drew blood' to describe a violent act," Manning 2461. Common sense similarly bears on judgments like whether a floating home is a "vessel," Lozman v. Riviera Beach, 568 U. S. 115, 120-121 (2013), whether tomatoes are “vegetables," Nix v. Hedden, 149 U. S. 304, 306-307 (1893), and whether a skin irritant is a "chemical weapon," Bond, 572 U. S., at 860-862. Why is any of this relevant to the major questions doctrine? Because context is also relevant to interpreting the scope of a delegation. Think about agency law, which is all about delegations. When an agent acts on behalf of a principal, she "has actual authority to take action designated or implied in the principal's manifestations to the agent ... as the agent reasonably understands [those] manifestations.” Restatement (Third) of Agency §2.02(1) (2005). Whether an agent's understanding is reasonable depends on “[t]he context in which the principal and agent interact,” including their "[p]rior dealings," industry "customs and usages,” and "the nature of the principal's business or the principal's personal situation." Id., §2.02, Comment e (emphasis added). With that in mind, imagine that a grocer instructs a clerk "go to the orchard and buy apples for the store.” Though this grant of apple-purchasing authority sounds unqualified, a reasonable clerk would know that there are limits. For example, if the grocer usually keeps 200 apples on hand, the clerk does not have actual authority to buy 1,000 the grocer would have spoken more directly if she meant to authorize such an out-of-the-ordinary purchase. A clerk who disregards context and stretches the words to their fullest will not have a job for long. This is consistent with how we communicate conversationally. Consider a parent who hires a babysitter to watch her young children over the weekend. As she walks out the door, the parent hands the babysitter her credit card and says: "Make sure the kids have fun." Emboldened, the

8 BIDEN v. NEBRASKA BARRETT, J., concurring babysitter takes the kids on a road trip to an amusement park, where they spend two days on rollercoasters and one night in a hotel. Was the babysitter's trip consistent with the parent's instruction? Maybe in a literal sense, because the instruction was open-ended. But was the trip consistent with a reasonable understanding of the parent's instruction? Highly doubtful. In the normal course, permission to spend money on fun authorizes a babysitter to take children to the local ice cream parlor or movie theater, not on a multiday excursion to an out-of-town amusement park. If a parent were willing to greenlight a trip that big, we would expect much more clarity than a general instruction "make sure the kids have fun." But what if there is more to the story? Perhaps there is obvious contextual evidence that the babysitter's jaunt was permissible for example, maybe the parent left tickets to the amusement park on the counter. Other clues, though less obvious, can also demonstrate that the babysitter took a reasonable view of the parent's instruction. Perhaps the parent showed the babysitter where the suitcases are, in the event that she took the children somewhere overnight. Or maybe the parent mentioned that she had budgeted $2,000 for weekend entertainment. Indeed, some relevant points of context may not have been communicated by the parent at all. For instance, we might view the parent's statement differently if this babysitter had taken the children on such trips before or if the babysitter were a grandparent. In my view, the major questions doctrine grows out of these same commonsense principles of communication. Just as we would expect a parent to give more than a general instruction if she intended to authorize a babysitterled getaway, we also “expect Congress to speak clearly if it wishes to assign to an agency decisions of vast 'economic and political significance." Utility Air, 573 U. S., at 324. That clarity may come from specific words in the statute,

Cite as: 600 U. S. (2023) 9 BARRETT, J., concurring but context can also do the trick. Surrounding circumstances, whether contained within the statutory scheme or external to it, can narrow or broaden the scope of a delegation to an agency. This expectation of clarity is rooted in the basic premise that Congress normally "intends to make major policy decisions itself, not leave those decisions to agencies." United States Telecom Assn. v. FCC, 855 F. 3d 381, 419 (CADC 2017) (Kavanaugh, J., dissenting from denial of reh'g en banc). Or, as Justice Breyer once observed, "Congress is more likely to have focused upon, and answered, major questions, while leaving interstitial matters [for agencies] to answer themselves in the course of a statute's daily administration.” S. Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 370 (1986); see also A. Gluck & L. Bressman, Statutory Interpretation From the Inside―An Empirical Study of Congressional Drafting, Delegation, and the Canons: Part I, 65 Stan. L. Rev. 901, 1003-1006 (2013). That makes eminent sense in light of our constitutional structure, which is itself part of the legal context framing any delegation. Because the Constitution vests Congress with “[a]ll legislative Powers,” Art. I, §1, a reasonable interpreter would expect it to make the big-time policy calls itself, rather than pawning them off to another branch. See West Virginia, 597 U. S., at (slip op., at 19) (explaining that the major questions doctrine rests on “both separation of powers principles and a practical understanding of legislative intent"). Crucially, treating the Constitution's structure as part of the context in which a delegation occurs is not the same as using a clear-statement rule to overenforce Article I's nondelegation principle (which, again, is the rationale behind the substantive-canon view of the major questions doctrine). My point is simply that in a system of separated powers, a reasonably informed interpreter would expect

10 BIDEN v. NEBRASKA BARRETT, J., concurring Congress to legislate on “important subjects" while delegating away only "the details." Wayman v. Southard, 10 Wheat. 1, 43 (1825). That is different from a normative rule that discourages Congress from empowering agencies. To see what I mean, return to the ambitious babysitter. Our expectation of clearer authorization for the amusementpark trip is not about discouraging the parent from giving significant leeway to the babysitter or forcing the parent to think hard before doing so. Instead, it reflects the intuition that the parent is in charge and sets the terms for the babysitter so if a judgment is significant, we expect the parent to make it. If, by contrast, one parent left the children with the other parent for the weekend, we would view the same trip differently because the parents share authority over the children. In short, the balance of power between those in a relationship inevitably frames our understanding of their communications. And when it comes to the Nation's policy, the Constitution gives Congress the reins-a point of context that no reasonable interpreter could ignore. Given these baseline assumptions, an interpreter should "typically greet" an agency's claim to "extravagant statutory power" with at least some "measure of skepticism." Utility Air, 573 U. S., at 324. That skepticism is neither "made-up" nor "new." Post, at 24, 29 (KAGAN, J., dissenting). On the contrary, it appears in a line of decisions spanning at least 40 years. E.g., King v. Burwell, 576 U. S. 473, 485-486 (2015); Gonzales v. Oregon, 546 U. S. 243, 267-268 (2006); Brown & Williamson, 529 U. S., at 159–160; Industrial Union Dept., AFL-CIO v. American Petroleum Institute, 448 U. S. 607, 645 (1980) (plurality opinion).³ Still, this skepticism does not mean that courts have an ³ Indeed, the doctrine may have even deeper roots. See ICC v. Cincinnati, N. O. & T. P. R. Co., 167 U. S. 479, 494–495 (1897) (explaining that for agency assertions of "vast and comprehensive" power, “no just rule of construction would tolerate a grant of such power by mere implication").

Cite as: 600 U. S. (2023) 11 BARRETT, J., concurring obligation (or even permission) to choose an inferior-but-tenable alternative that curbs the agency's authority—and that marks a key difference between my view and the "clear statement" view of the major questions doctrine. In some cases, the court's initial skepticism might be overcome by text directly authorizing the agency action or context demonstrating that the agency's interpretation is convincing. (And because context can suffice, I disagree with JUSTICE KAGAN's critique that "[t]he doctrine forces Congress to delegate in highly specific terms." Post, at 24.) If so, the court must adopt the agency's reading despite the "majorness" of the question.4 In other cases, however, the court might conclude that the agency's expansive reading, even if "plausible," is not the best. West Virginia, 597 U. S., at (slip op., at 19). In that event, the major questions doctrine plays a role, because it helps explain the court's conclusion that the agency overreached. Consider Brown & Williamson, in which we rejected the Food and Drug Administration's (FDA's) determination that tobacco products were within its regulatory purview. 529 U. S., at 131. The agency's assertion of authoritywhich depended on the argument that nicotine is a "drug"" and that cigarettes and smokeless tobacco are “drug delivery devices"" would have been plausible if the relevant statutory text were read in a vacuum. Ibid. But a vacuum is no home for a textualist. Instead, we stressed that the "meaning" of a word or phrase "may only become evident when placed in context." Id., at 132 (emphasis added). And the critical context in Brown & Williamson was tobacco's 4I am dealing only with statutory interpretation, not the separate argument that a statutory delegation exceeds constitutional limits. See Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 474 (2001) (describing a delegation held unconstitutional because it "conferred authority to regulate the entire economy on the basis of" an imprecise standard).

12 BIDEN v. NEBRASKA BARRETT, J., concurring “unique political history”: the FDA's longstanding disavowal of authority to regulate it, Congress's creation of "a distinct regulatory scheme for tobacco products,” and the tobacco industry's “significant” role in “the American economy." Id., at 159-160. In light of those considerations, we concluded that "Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion." Id., at 160. We have also been “[s]keptical of mismatches" between broad "invocations of power by agencies" and relatively narrow "statutes that purport to delegate that power." In re MCP No. 165, OSHA, Interim Final Rule: Covid-19 Vaccination and Testing, 20 F. 4th 264, 272 (CA6 2021) (Sutton, C. J., dissenting from denial of initial hearing en banc). Just as an instruction to “pick up dessert” is not permission to buy a four-tier wedding cake, Congress's use of a "subtle device" is not authorization for agency action of "enormous importance." MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 231 (1994); cf. Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468 (2001) (Congress does not “hide elephants in mouseholes"). This principle explains why the Centers for Disease Control and Prevention's (CDC's) general authority to "prevent the ... spread of communicable diseases"" did not authorize a nationwide eviction moratorium. Alabama Assn. of Realtors, 594 U. S., at (slip op., at 2-3, 6). The statute, we observed, was a "wafer-thin reed" that could not support the assertion of "such sweeping power.” Id., at (slip op., at 7). Likewise, in West Virginia, we held that a "little-used backwater" provision in the Clean Air Act could not justify an Environmental Protection Agency (EPA) rule that would "restructur[e] the Nation's overall mix of electricity generation." 597 U. S., at (slip op., at 16, 26). Another telltale sign that an agency may have transgressed its statutory authority is when it regulates outside

Cite as: 600 U. S. (2023) 13 BARRETT, J., concurring its wheelhouse. For instance, in Gonzales v. Oregon, we rebuffed an interpretive rule from the Attorney General that restricted the use of controlled substances in physician-assisted suicide. 546 U. S., at 254, 275. This judgment, we explained, was a medical one that lay beyond the Attorney General's expertise, and so a sturdier source of statutory authority than “an implicit delegation" was required. Id., at 267-268. Likewise, in King v. Burwell, we blocked the Internal Revenue Service's (IRS's) attempt to decide whether the Affordable Care Act's tax credits could be available on federally established exchanges. 576 U. S., at 485486. Among other things, the IRS's lack of "expertise in crafting health insurance policy" made us think that “had Congress wished to assign that question to an agency, it surely would have done so expressly.” Id., at 486. Echoing the theme, our reasoning in Alabama Association of Realtors rested partly on the fact that the CDC's eviction moratorium "intrude[d] into ... the landlord-tenant relationship"-hardly the day-in, day-out work of a public-health agency. 594 U. S., at (slip op., at 6). National Federation of Independent Business v. OSHA is of a piece. 595 U.S. (2022) (per curiam). There, we held that the Occupational Safety and Health Administration's (OSHA's) authority to ensure “safe and healthful working conditions"" did not encompass the power to mandate the vaccination of employees; as we explained, the statute empowered the agency "to set workplace safety standards, not broad public health measures." Id., at (slip op., at 2, 6). The shared intuition behind these cases is that a reasonable speaker would not understand Congress to confer an unusual form of authority without saying more. We have also pumped the brakes when “an agency claims discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy."" Utility Air, 573 U. S., at 324. Of course, an agency's post

14 BIDEN v. NEBRASKA BARRETT, J., concurring enactment conduct does not control the meaning of a statute, but "this Court has long said that courts may consider the consistency of an agency's views when we weigh the persuasiveness of any interpretation it proffers in court." Bittner v. United States, 598 U. S. 85, 97 (2023) (citing Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944)). The agency's track record can be particularly probative in this context: A longstanding “want of assertion of power by those who presumably would be alert to exercise it" may provide some clue that the power was never conferred. FTC v. Bunte Brothers, Inc., 312 U. S. 349, 352 (1941). Once again, Brown & Williamson is a good example. There, we balked at the FDA's novel attempt to regulate tobacco in part because this move was "[c]ontrary to its representations to Congress since 1914." 529 U. S., at 159. And in Utility Air, we were dubious when the EPA discovered "newfound authority" in the Clean Air Act that would have allowed it to require greenhouse-gas permits for “millions of small sources including retail stores, offices, apartment buildings, shopping centers, schools, and churches." 573 U. S., at 328. If the major questions doctrine were a substantive canon, then the common thread in these cases would be that we "exchange [d] the most natural reading of a statute for a bearable one more protective of a judicially specified value." Barrett 111. But by my lights, the Court arrived at the most plausible reading of the statute in these cases. To be sure, "[a]ll of these regulatory assertions had a colorable textual basis." West Virginia, 597 U. S., at (slip op., at 18). In each case, we could have “[p]ut on blinders” and confined ourselves to the four corners of the statute, and we might have reached a different outcome. Sykes v. United States, 564 U. S. 1, 43 (2011) (KAGAN, J., dissenting). Instead, we took "off those blinders," "view[ed] the statute as a whole,” ibid., and considered context that would be important to a reasonable observer. With the full picture in

Cite as: 600 U. S. (2023) 15 BARRETT, J., concurring view, it became evident in each case that the agency's assertion of "highly consequential power" went "beyond what Congress could reasonably be understood to have granted." West Virginia, 597 U. S., at (slip op., at 20). III As for today's case: The Court surely could have "hi[t] the send button," post, at 23 (KAGAN, J., dissenting), after the routine statutory analysis set out in Part III-A. But it is nothing new for a court to punctuate its conclusion with an additional point, and the major questions doctrine is a good one here. Ante, at 25, n. 9. It obviously true hat the Secretary's loan cancellation program has "vast 'economic and political significance."" Utility Air, 573 U. S., at 324. That matters not because agencies are incapable of making highly consequential decisions, but rather because an initiative of this scope, cost, and political salience is not the type that Congress lightly delegates to an agency. And for the reasons given by the Court, the HEROES Act provides no indication that Congress empowered the Secretary to do anything of the sort. Ante, at 12-18, 25. Granted, some context clues from past major questions cases are absent here-for example, this is not a case where the agency is operating entirely outside its usual domain. But the doctrine is not an on-off switch that flips when a critical mass of factors is present—again, it simply reflects "common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude.” Brown & Williamson, 529 U. S., at 133. Common sense tells us that as more indicators from our previous major questions cases are present, the less likely it is that Congress would have delegated the power to the agency without saying so more clearly. Here, enough of those indicators are present to demonstrate that the Secretary has gone far “beyond what Congress could reasonably be understood to have granted” in

16 BIDEN v. NEBRASKA BARRETT, J., concurring (slip op., the HEROES Act. West Virginia, 597 U. S., at at 20). Our decision today does not “trump" the statutory text, nor does it make this Court the "arbiter" of "national policy." Post, at 24–25 (KAGAN, J., dissenting). Instead, it gives Congress's words their best reading. * * The major questions doctrine has an important role to play when courts review agency action of “vast 'economic and political significance."" Utility Air, 573 U. S., at 324. But the doctrine should not be taken for more than it is— the familiar principle that we do not interpret a statute for all it is worth when a reasonable person would not read it that way.

Cite as: 600 U. S. (2023) No. 22-506 KAGAN, J., dissenting SUPREME COURT OF THE UNITED STATES 1 JOSEPH R. BIDEN, PRESIDENT OF THE UNITED STATES, ET AL., PETITIONERS U. NEBRASKA, ET AL. ON WRIT OF CERTIORARI BEFORE JUDGMENT TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT [June 30, 2023] JUSTICE KAGAN, with whom JUSTICE SOTOMAYOR and JUSTICE JACKSON join, dissenting. In every respect, the Court today exceeds its proper, limited role in our Nation's governance. Some 20 years ago, Congress enacted legislation, called the HEROES Act, authorizing the Secretary of Education to provide relief to student-loan borrowers when a national emergency struck. The Secretary's authority was bounded: He could do only what was "necessary" to alleviate the emergency's impact on affected borrowers' ability to repay their student loans. 20 U. S. C. §1098bb(a)(2). But within that bounded area, Congress gave discretion to the Secretary. He could "waive or modify any statutory or regulatory provision" applying to federal student-loan programs, including provisions relating to loan repayment and forgiveness. And in so doing, he could replace the old provisions with new "terms and conditions." §§1098bb(a)(1), (b)(2). The Secretary, that is, could give the relief that was needed, in the form he deemed most appropriate, to counteract the effects of a national emergency on borrowers' capacity to repay. That may have been a good idea, or it may have been a bad idea. Either way, it was what Congress said. When COVID hit, two Secretaries serving two different

2 BIDEN v. NEBRASKA KAGAN, J., dissenting Presidents decided to use their HEROES Act authority. The first suspended loan repayments and interest accrual for all federally held student loans. The second continued that policy for a time, and then replaced it with the loan forgiveness plan at issue here, granting most low- and middle-income borrowers up to $10,000 in debt relief. Both relied on the HEROES Act language cited above. In establishing the loan forgiveness plan, the current Secretary scratched the pre-existing conditions for loan discharge, and specified different conditions, opening loan forgiveness to more borrowers. So he "waive[d]” and “modif[ied]" statutory and regulatory provisions and applied other "terms and conditions” in their stead. That may have been a good idea, or it may have been a bad idea. Either way, the Secretary did only what Congress had told him he could. The Court's first overreach in this case is deciding it at all. Under Article III of the Constitution, a plaintiff must have standing to challenge a government action. And that requires a personal stake an injury in fact. We do not allow plaintiffs to bring suit just because they oppose a policy. Neither do we allow plaintiffs to rely on injuries suffered by others. Those rules may sound technical, but they enforce "fundamental limits on federal judicial power." Allen v. Wright, 468 U. S. 737, 750 (1984). They keep courts acting like courts. Or stated the other way around, they prevent courts from acting like this Court does today. The plaintiffs in this case are six States that have no personal stake in the Secretary's loan forgiveness plan. They are classic ideological plaintiffs: They think the plan a very bad idea, but they are no worse off because the Secretary differs. In giving those States a forum-in adjudicating their complaintthe Court forgets its proper role. The Court acts as though it is an arbiter of political and policy disputes, rather than of cases and controversies. And the Court's role confusion persists when it takes up the merits. For years, this Court has insisted that the way

Cite as: 600 U. S. (2023) 3 KAGAN, J., dissenting to keep judges' policy views and preferences out of judicial decisionmaking is to hew to a statute's text. The HEROES Act's text settles the legality of the Secretary's loan forgiveness plan. The statute provides the Secretary with broad authority to give emergency relief to student-loan borrowers, including by altering usual discharge rules. What the Secretary did fits comfortably within that delegation. But the Court forbids him to proceed. As in other recent cases, the rules of the game change when Congress enacts broad delegations allowing agencies to take substantial regulatory measures. See, e.g., West Virginia v. EPA, 597 U.S. (2022). Then, as in this case, the Court reads statutes unnaturally, seeking to cabin their evident scope. And the Court applies heightened-specificity requirements, thwarting Congress's efforts to ensure adequate responses to unforeseen events. The result here is that the Court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness. Congress authorized the forgiveness plan (among many other actions); the Secretary put it in place; and the President would have been accountable for its success or failure. But this Court today decides that some 40 million Americans will not receive the benefits the plan provides, because (so says the Court) that assistance is too “significan[t].” Ante, at 20-21. With all respect, I dissent. I "No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." Simon v. Eastern Ky. Welfare Rights Organization, 426 U. S. 26, 37 (1976). In our system, "[f]ederal courts do not possess a roving commission to publicly opine on every legal question." Trans Union LLC v. Ramirez, 594 U. S. (2021) (slip op., at 8). Nor do they "exercise general legal oversight of the Legislative and

4 BIDEN v. NEBRASKA KAGAN, J., dissenting Executive Branches." Ibid. court may address the legality of a government action only if the person challenging it has standing which requires that the person have suffered a "concrete and particularized injury." Ibid. It is not enough for the plaintiff to assert a "generalized grievance[]" about government policy. Gill v. Whitford, 585 U. S. (2018) (slip op., at 13). And critically here, the plaintiff cannot rest its claim on a third party's rights and interests. See Warth v. Seldin, 422 U. S. 490, 499 (1975). The plaintiff needs its own stake—a “personal stake”—in the outcome of the litigation. TransUnion, 594 U. S., at (slip op., at 7). If the plaintiff has no such stake, a court must stop in its tracks. To decide the case is to exceed the permissible boundaries of the judicial role. That is what the Court does today. The plaintiffs here are six States: Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. They oppose the Secretary's loan cancellation plan on varied policy and legal grounds. But as everyone agrees, those objections are just general grievances; they do not show the particularized injury needed to bring suit. And the States have no straightforward way of making that showing of explaining how they are harmed by a plan that reduces individual borrowers' federal student-loan debt. So the States have thrown no fewer than four different theories of injury against the wall, hoping that a court anxious to get to the merits will say that one of them sticks. The most that can be said of the theory the majority selects, proffered solely by Missouri, is that it is less risible than the others. It still contravenes a bedrock principle of standing law-that a plaintiff cannot ride on someone else's injury. Missouri is doing just that in relying on injuries to the Missouri Higher Education Loan Authority (MOHELA), a legally and financially independent public corporation. And that means the Court, by deciding this case, exercises authority it does not have. It violates the Constitution.

Cite as: 600 U. S. (2023) 5 KAGAN, J., dissenting A Missouri's theory of standing, as accepted by the majority, goes as follows. MOHELA is a state-created corporation participating in the student-loan market. As part of that activity, it has contracted with the Department of Education to service federally held loans-essentially, to handle billing and collect payments for the Federal Government. Under that contract, MOHELA receives an administrative fee for each loan serviced. When a loan is canceled, MOHELA will not get a fee; so the Secretary's plan will cost MOHELA money. And if MOHELA is harmed, Missouri must be harmed, because the corporation is a “public instrumentality” and, as such, "part of Missouri's government." Brief for Respondents 16-17; see ante, at 8–9. Up to the last step, the theory is unexceptionable—except that it points to MOHELA as the proper plaintiff. Financial harm is a classic injury in fact. MOHELA plausibly alleges that it will suffer that harm as a result of the Secretary's plan. So MOHELA can sue the Secretary, as the Government readily concedes. See Tr. of Oral Arg. 18. But not even Missouri, and not even the majority, claims that MOHELA's revenue loss gets passed through to the State. As further discussed below, MOHELA is financially independent from Missouri-as corporations typically are, the better to insulate their creators from financial loss. See infra, at 6. So MOHELA's revenue decline-the injury in fact claimed to justify this suit—is not in fact Missouri's. The State's treasury will not be out one penny because of the Secretary's plan. The revenue loss allegedly grounding this case is MOHELA's alone. Which leads to an obvious question: Where's MOHELA? The answer is: As far from this suit as it can manage. MOHELA could have brought this suit. It possesses the power under Missouri law to "sue and be sued" in its own name. Mo. Rev. Stat. §173.385.1(3) (2016). But MOHELA is not a party here. Nor is it an amicus. Nor is it even a

6 BIDEN v. NEBRASKA KAGAN, J., dissenting rooting bystander. MOHELA was "not involved with the decision of the Missouri Attorney General's Office” to file this suit. Letter from Appellees in No. 22-3179 (CA8), p. 3 (Nov. 1, 2022). And MOHELA did not cooperate with the Attorney General's efforts. When the AG wanted documents relating to MOHELA's loan-servicing contract, to aid him in putting forward the State's standing theory, he had to file formal "sunshine law" demands on the entity. See id., at 3-4. MOHELA had no interest in assisting voluntarily. If all that makes you suspect that MOHELA is distinct from the State, you would be right. And that is so as a matter of law and financing alike. Yes, MOHELA is a creature state statute, a public instrumentality established to serve a public function. §173.360. But the law sets up MOHELA as a corporation—a so-called "body corporate”— with a "[s]eparate legal personality.” Ibid.; First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611, 625 (1983) (Bancec). Or said a bit differently, MOHELA is like the lion's share of corporations, whether public or private-a "separate legal [entity] with distinct legal rights and obligations" from those belonging to its creator. Agency for Int'l Development v. Alliance for Open Society Int'l Inc., 591 U.S. (2020) (slip op., at 5). MOHELA, for example, has the power to contract with other entities, which is how it entered into a loan-servicing contract with the Department of Education. §173.385.1(15). MOHELA's assets, including the fees gained from that contract, are not “part of the revenue of the [S]tate" and cannot be "used for the payment of debt incurred by the [S]tate." §§173.386, 173.425. On the other side of the ledger, MOHELA's debts are MOHELA's alone; Missouri cannot be liable for them. §173.410. And as noted earlier, MOHELA has the power to "sue and be sued” independent of Missouri, so it can both "prosecute and defend" See

Cite as: 600 U. S. (2023) 7 KAGAN, J., dissenting all its varied interests. §173.385.1(3); see supra, at 5. Indeed, before this case, Missouri had never tried to appear in court on MOHELA's behalf. That is no surprise. In the statutory scheme, independence is everywhere: State law created MOHELA, but in so doing set it apart. The Missouri Supreme Court itself recognized as much in addressing a near-carbon-copy state instrumentality. MOHEFA (note the one-letter difference) issues bonds to support various health and educational institutions in the State. Like MOHELA, MOHEFA is understood as a "public instrumentality" serving a "public function." Menorah Medical Center v. Health and Ed. Facilities Auth., 584 S. W. 2d 73, 76 (Mo. 1979). And like MOHELA, MOHEFA has a board appointed by the Governor and sends annual reports to a state department. See Mo. Rev. Stat. §§360.020, 360.140 (1978); ante, at 9 (suggesting those features matter). But the State Supreme Court, when confronted with a claim that MOHEFA's undertakings should be ascribed to the State, could hardly have been more dismissive. The court thought it beyond dispute that MOHEFA “is not the [S]tate,” and that its activities are not state activities. Menorah, 584 S. W. 2d, at 78. Citing MOHEFA's financial and legal independence, the court explained that “[s]imilar bodies have been adjudged as 'separate entities' from" Missouri. Ibid. MOHELA is no different. Under our usual standing rules, that separation would matter-indeed, would decide this case. A plaintiff, this Court has held time and again, cannot rest its claim to judicial relief on the “legal rights and interests" of third parties. Warth, 422 U. S., at 499. And MOHELA qualifies as such a party, for all the reasons just given. That MOHELA is publicly created makes not a whit of difference: When a “government instrumentalit[y]” is “established as [a] juridical entit[y] distinct and independent from [its] sovereign,” the law-including the law of standing is supposed to treat it that way. Bancec, 462 U. S., at 626-627; see Sloan

8 BIDEN v. NEBRASKA KAGAN, J., dissenting Shipyards Corp. v. United States Shipping Bd. Emergency Fleet Corporation, 258 U. S. 549, 567 (1922). So this case should have been open-and-shut. Missouri and MOHELA are legally, and also financially, “separate entities.” Menorah, 584 S. W. 2d, at 78. MOHELA is fully capable of representing its own interests, and always has done so before. The injury to MOHELA thus does not entitle Missouri-under our normal standing rules-to go to court. And those normal rules are more than just rules: They are, as this case shows, guarantors of our constitutional order. The requirement that the proper party-the party actually affected challenge an action ensures that courts do not overstep their proper bounds. See Clapper v. Amnesty Int'l USA, 568 U. S. 398, 408-409 (2013) ("Relaxation of standing [rules] is directly related to the expansion of judicial power"). Without that requirement, courts become "forums for the ventilation of public grievances”—for settlement of ideological and political disputes. Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 473 (1982). The kind forum this Court has become today. Is there a person in America who thinks Missouri is here because it is worried about MOHELA's loss of loan-servicing fees? I would like to meet him. Missouri is here because it thinks the Secretary's loan cancellation plan makes for terrible, inequitable, wasteful policy. And so too for Arkansas, Iowa, Kansas, Nebraska, and South Carolina. And maybe all of them are right. But that question is not what this Court sits to decide. That question is "more appropriately addressed in the representative branches," and by the broader public. Allen, 468 U. S., at 751. Our third-party standing rules, like the rest of our standing doctrine, exist to separate powers in that way to send political issues to political institutions, and retain only legal controversies, brought by plaintiffs who have suffered real legal injury. If MOHELA had brought this suit, we would have had to resolve it, however

Cite as: 600 U. S. (2023) 9 KAGAN, J., dissenting hot or divisive. But Missouri? In adjudicating Missouri's claim, the majority reaches out to decide a matter it has no business deciding. It blows through a constitutional guardrail intended to keep courts acting like courts. B The majority does not over ver-expend itself in defending that action. It recites the State's assertion that a "harm to MOHELA is also a harm to Missouri” because the former is the latter's instrumentality. Ante, at 8. But in doing so, the majority barely addresses MOHELA's separate corporate identity, its financial independence, and its distinct legal rights. In other words, the majority glides swiftly over all the attributes of MOHELA ensuring that its economic losses (1) are not passed on to the State and (2) can be rectified (if there is legal wrong) without the State's help. The majority is left to argue from a couple of prior decisions and a single idea, the latter relating to the State's desire to “aid Missouri college students." Ante, at 9. But the decisions do not stand for what the majority claims. And the idea collides with another core precept of standing law. All in all, the majority's justifications turn standing law from a pillar of a restrained judiciary into nothing more than "a lawyer's game." Massachusetts v. EPA, 549 U. S. 497, 548 (2007) (ROBERTS, C. J., dissenting). The majority mainly relies on Arkansas v. Texas, 346 U. S. 368 (1953), but that case shows only that not all public instrumentalities are the same. The Court there held that Arkansas could bring suit on behalf of a state university. But it did so because the school lacked the financial and legal separateness MOHELA has. Arkansas, we observed, "owns all the property used by the University.” Id., at 370. And the suit, if successful, would have enhanced that property: The litigation sought to stop Texas from interfering with a contract to build a medical facility on campus. For the same reason, the Court found that “any injury under

10 BIDEN v. NEBRASKA KAGAN, J., dissenting the contract to the University is an injury to Arkansas": The State was the principal beneficiary of the contract to improve its own property. Ibid. So Arkansas had the sort of direct financial interest not present here. And there is more: The University, the Court thought, could not sue on its own. See ibid. The majority suggests otherwise, citing a state-court decision holding that corporations usually have the power to bring and defend legal actions. See ante, at 11-12. But the Arkansas Court referenced a different state-court decision- -one holding that another state school was "not authorized” to “sue and be sued." Allen Eng. Co. v. Kays, 106 Ark. 174, 177, 152 S. W. 992, 993 (1913); see Arkansas, 346 U. S., at 370, and n. 9. That decision led this Court to conclude that Arkansas law treated “a suit against the University" as “a suit against the State." Id., at 370. But if state law had not done so-as it does not in Missouri for MOHELA? See supra, at 6–7. The Court made clear that a State cannot stand in for an independent entity. The State, the Court said, “must, of course, represent an interest of her own and not merely that of her citizens or corporations." Ibid. The majority's second case-Lebron v. National Railroad Passenger Corporation, 513 U. S. 374 (1995)—is yet further afield. The issue there was whether Amtrak, a public corporation similar to MOHELA, had to comply with the First Amendment. The Court held that it did, labeling Amtrak a state actor for that purpose. On the opposite view, we reasoned, a government could "evade the most solemn obligations imposed in the Constitution by simply resorting to the corporate form." Id., at 397; see ibid. (noting that Plessy could then be "resurrected by the simple device" of creating a public corporation to run trains). But that did not mean Amtrak was equivalent to the Government for all purposes. Over and over, we cabined our holding that Amtrak was a state actor by adding a phrase like "for purposes of the First Amendment" or other constitutional rights. Id., at 400; see

Cite as: 600 U. S. (2023) 11 KAGAN, J., dissenting id., at 383 (Amtrak “must be regarded as a Government entity for First Amendment purposes”); id., at 392 (Amtrak is “a Government entity for purposes of determining the constitutional rights of citizens"); id., at 394 (Amtrak is an “instrumentality of the United States for the purpose of individual rights guaranteed against the Government”); id., at 397, 399, 400 (similar, similar, and similar). But for other purposes, a different rule might, or would, obtain. Our holding, we said, did not mean Amtrak had sovereign immunity. See id., at 392. And most relevant here, we reaffirmed that "[t]he State does not, by becoming a corporator, identify itself with the corporation" for purposes of litigation. Id., at 398. Or said again, the Government is “not a party to suits brought by or against" its corporation. Id., at 399. So what Lebron tells us about MOHELA is that it must comply with the Constitution. Lebron offers no support (more like the opposite) for the different view that MOHELA and Missouri are interchangeable parties in litigation.¹ ¹The same goes for the majority's other case about Amtrak, which just "reiterate [s]" Lebron's reasoning. Ante, at 11; see Department of Transportation v. Association of American Railroads, 575 U. S. 43 (2015). There too we held that Amtrak was a "governmental entity" for purposes of the "requirements of the Constitution"-specifically, the nondelegation doctrine. Id., at 54. And there too we kept our holding as limited as possible, repeatedly stating that we were treating Amtrak as the Government for that purpose alone. See, e.g., id., at 51 (“for purposes of separation-of-powers analysis under the Constitution"); id., at 54 ("for purposes of the Constitution's separation of powers provisions"); id., at 55 ("for purposes of determining the constitutional issues presented in this case"). As for any other purpose? Not a word to suggest the same result. And as even the majority concedes, "a public corporation can count as part of the State for some but not other purposes." Ante, at 12, n. 3 (internal quotation marks omitted). The Amtrak decisions, to continue borrowing the majority's language, "said nothing about, and had no reason to address, whether an injury to [a] public corporation is a harm to the [Government]." Ibid.

12 BIDEN v. NEBRASKA KAGAN, J., dissenting Remaining is the majority's unsupported—and insupportable idea that the Secretary's plan “necessarily” hurts Missouri because it “impair[s]” MOHELA's "efforts to aid [the State's] college students." Ante, at 9. To begin with, it seems unlikely that the reduction in MOHELA's revenues resulting from the discharge would make it harder for students to "access student loans," as the majority contends. Ante, at 8. MOHELA is not a lender; it services loans others have made. Which is probably why even Missouri has never tried to show that the Secretary's plan will so detrimentally affect the State's borrowers. In any event and more important—such a harm to citizens cannot provide an escape hatch out of MOHELA's legal and financial independence. That is because of another canonical limit on a State's ability to ride on third parties: A State may never sue the Federal Government based on its citizens' rights and interests. See Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U. S. 592, 610, n. 16 (1982); Haaland v. Brackeen, 599 U.S. and n. 11 (2023) (slip op., at 32, and n. 11). Or said more technically, a "State does not have standing as parens patriae to bring an action against the Federal Government." Ibid.; see Massachusetts v. Mellon, 262 U. S. 447, 485-486 (1923). So Missouri cannot get standing by asserting that a harm to MOHELA will harm the State's citizens. Missouri needs to show that the harm to MOHELA produces harm to the State itself. And because, as explained above, MOHELA was set up (as corporations typically are) to insulate its creator from such derivative harm, Missouri is incapable of making that showing. See supra, at 6. The separateness, both financial and legal, between MOHELA and Missouri makes MOHELA alone the proper party. The author of today's opinion once wrote that a 1970s-era standing decision "became emblematic" of "how utterly manipulable" this Court's standing law is “if not taken seriously as a matter of judicial self-restraint." Massachusetts,

Cite as: 600 U. S. (2023) 13 KAGAN, J., dissenting 549 U. S., at 548 (ROBERTS, C. J., dissenting). After today, no one will have to go back 50 years for the classic case of the Court manipulating standing doctrine, rather than obeying the edict to stay in its lane. The majority and I differ, as I'll soon address, on whether the Executive Branch exceeded its authority in issuing the loan cancellation plan. But assuming the Executive Branch did so, that does not license this Court to exceed its own role. Courts must still "function as courts,” this one no less than others. Ibid. And in our system, that means refusing to decide cases that are not really cases because the plaintiffs have not suffered concrete injuries. The Court ignores that principle in allowing Missouri to piggy-back on the “legal rights and interests" of an independent entity. Warth, 422 U. S., at 499. If MOHELA wanted to, it could have brought this suit. It declined to do so. Under the non-manipulable, serious version of standing law, that would have been the end of the matter-regardless how much Missouri, or this Court, objects to the Secretary's plan. II The majority finds no firmer ground when it reaches the merits. The statute Congress enacted gives the Secretary broad authority to respond to national emergencies. That authority kicks in only under exceptional conditions. But when it kicks in, the Secretary can take exceptional measures. He can "waive or modify any statutory or regulatory provision" applying to the student-loan program. §1098bb(a)(1). And as part of that power, he can “appl[y]” new "terms and conditions” “in lieu of” the former ones. §1098bb(b)(2). That means when an emergency strikes, the Secretary can alter, so as to cover more people, pre-existing provisions enabling loan discharges. Which is exactly what the Secretary did in establishing his loan forgiveness plan. The majority's contrary conclusion rests first on stilted textual analysis. The majority picks the statute apart piece by

14 BIDEN v. NEBRASKA KAGAN, J., dissenting piece in an attempt to escape the meaning of the whole. But the whole the expansive delegation-is so apparent that the majority has no choice but to justify its holding on extrastatutory grounds. So the majority resorts, as is becoming the norm, to its so-called major-questions doctrine. And the majority again reveals that doctrine for what it is a way for this Court to negate broad delegations Congress has approved, because they will have significant regulatory impacts. Thus the Court once again substitutes itself for Congress and the Executive Branch-and the hundreds of millions of people they represent—in making this Nation's most important, as well as most contested, policy decisions. A A bit of background first, to give a sense of where the HEROES Act came from. In 1991 and again in 2002, Congress authorized the Secretary to grant student-loan relief to borrowers affected by a specified war or emergency. The first statute came out of the Persian Gulf Conflict. It gave the Secretary power to "waive or modify any statutory or regulatory provision” relating to student-loan programs in order to assist "the men and women serving on active duty in connection with Operation Desert Storm.” §§372(a)(1), (b), 105 Stat. 93. The next iteration responded to the impacts of the September 11 terrorist attacks. It too gave the Secretary power to "waive or modify" any student-loan provision, but this time to help borrowers affected by the "national emergency" created by September 11. §2(a)(1), 115 Stat. 2386. With those one-off statutes in its short-term memory, Congress decided there was a need for a broader and more durable emergency authorization. So in 2003, it passed the HEROES Act. Instead of specifying a particular crisis, that statute enables the Secretary to act "as [he] deems necessary" in connection with any military operation or “national

Cite as: 600 U. S. (2023) 15 KAGAN, J., dissenting emergency." §1098bb(a)(1). But the statute's greater coverage came with no sacrifice of potency. When the law's emergency conditions are satisfied, the Secretary again has the power to "waive or modify any statutory or regulatory provision” relating to federal student-loan programs. Ibid. Before turning to the scope of that power, note the stringency of the triggering conditions. Putting aside military applications, the Secretary can act only when the President has declared a national emergency. See §1098ee(4). Further, the Secretary may provide benefits only to "affected individuals" defined as anyone who "resides or is employed in an area that is declared a disaster area . . . ...in connection with a national emergency" or who has "suffered direct economic hardship as a direct result of a . . . national emergency." §§1098ee(2)(C)-(D). And the Secretary can do only what he determines to be “necessary” to ensure that those individuals "are not placed in a worse position financially in relation to" their loans "because of" the emergency. §1098bb(a)(2). That last condition, said more simply, requires the Secretary to show that the relief he awards does not go beyond alleviating the economic effects of an emergency on affected borrowers' ability to repay their loans. But if those conditions are met, the Secretary's delegated authority is capacious. As in the prior statutes, the Secretary has the linked power to "waive or modify any statutory or regulatory provision” applying to the student-loan programs. §1098bb(a)(1). To start with the phrase after the verbs, "the word 'any' has an expansive meaning." United States v. Gonzales, 520 U. S. 1, 5 (1997). “Any" of the referenced provisions means, well, any of those provisions. And those provisions include several relating to student-loan cancellation more precisely, specifying conditions in which the Secretary can discharge loan principal. See §§1087, 1087dd(g); 34 CFR §§682.402, 685.212 (2022). Now go back to the twin verbs: "waive or modify." To "waive" means to “abandon, renounce, or surrender" so here, to

16 BIDEN v. NEBRASKA KAGAN, J., dissenting eliminate a regulatory requirement or condition. Black's Law Dictionary 1894 (11th ed. 2019). To “modify" means "[t]o make somewhat different” or “to reduce in degree or extent”— '—so here, to lessen rather than eliminate such a requirement. Id., at 1203. Then put the words together, as they appear in the statute: To "waive or modify" a requirement means to lessen its effect, from the slightest adjustment up to eliminating it altogether. Of course, making such changes may leave gaps to fill. So the statute says what is anyway obvious: that the Secretary's waiver/modification power includes the ability to specify "the terms and conditions to be applied in lieu of such [modified or waived] statutory and regulatory provisions." §1098bb(b)(2). Finally, attach the “waive or modify" power to all the provisions relating to loan cancellation: The Secretary may amend, all the way up to discarding, those provisions and fill the holes that action creates with new terms designed to counteract an emergency's effects on borrowers. Before reviewing how that statutory scheme operated here, consider how it might work for a hypothetical emergency that the enacting Congress had in the front of its mind. As noted above, a precursor to the HEROES Act was a statute authorizing the Secretary to assist student-loan borrowers affected by September 11. See supra, at 14. The HEROES Act, as Congress designed it, would give him the identical power to address similar terrorist attacks in the future. So imagine the horrific. A terrorist organization sets off a dirty bomb in Chicago. Beyond causing deaths, the incident leads millions of residents (including many with student loans) to flee the city to escape the radiation. They must find new housing, probably new jobs. And still their student-loan bills are coming due every month. To prevent widespread loan delinquencies and defaults, the Secretary wants to discharge $10,000 for the class of affected borrowers. Is that legal? Of course it is; it is exactly what Congress provided for. The statutory preconditions

Cite as: 600 U. S. (2023) 17 KAGAN, J., dissenting are met: The President has declared a national emergency; the Secretary's proposed relief extends only to "affected individuals"; and the Secretary has deemed the action "necessary to ensure" that the attack does not place those borrowers "in a worse position" to repay their loans. §1098bb(a). And the statutory powers of waiver and modification give the Secretary the means to offer the needed assistance. He can, for purposes of this special loan forgiveness program, scratch the pre-existing conditions for discharge and specify different conditions met by the affected borrowers. That is what the congressionally delegated powers are for. If the Secretary did not use them, Congress would be appalled. The HEROES Act applies to the COVID loan forgiveness program in just the same way. Of course, Congress did not know COVID was coming; and maybe it wasn't even thinking about pandemics generally. But that is immaterial, because Congress delegated broadly, for all national emergencies. It is true, too, that the Secretary's use of the HEROES Act delegation has proved politically controversial, in a way that assistance to terrorism victims presumably would not. But again, that fact is irrelevant to the lawfulness of the program. If the hypothetical plan just discussed is legal, so too is this real one. Once more, the statutory preconditions have been met. The President declared the COVID pandemic a “national emergency." §1098ee(4); see 87 Fed. Reg. 10289 (2022). The eligible borrowers all fall within the law's definition of "affected individual[s]." §1098ee(2); see supra, at 15. And the Secretary “deem[ed]" relief “necessary to ensure" that the pandemic did not put low- and middle-income borrowers "in a worse position" to repay their loans. §§1098bb(a)(1)-(2).² With those boxes checked, 2 More specifically, the Secretary determined that without a loan discharge, borrowers making less than $125,000 are likely to experience higher delinquency and default rates because of the pandemic's economic effects. See App. 234-242, 257-259. In a puzzling footnote, the majority

18 BIDEN v. NEBRASKA KAGAN, J., dissenting the Secretary's waiver/modification powers kick in. And the Secretary used them just as described in the hypothetical above. For purposes of the COVID program, he scratched the conditions for loan discharge contained in several provisions. See App. 261-262 (citing §§1087, 1087dd(g); 34 CFR §§682.402, 685.212). He then altered those provisions by specifying different conditions, which opened up loan forgiveness to more borrowers. So he "waive[d]” and “modif[ied]” pre-existing law and, in so doing, applied new "terms and conditions" "in lieu of" the old. §§1098bb(a)(1), (b)(2); see 87 Fed. Reg. 61514. As in the prior hypothetical, then, he used his statutory emergency powers in the manner Congress designed. How does the majority avoid this conclusion? By picking the statute apart, and addressing each segment of Congress's authorization as if it had nothing to do with the others. For the first several pages-really, the heart of its analysis, the majority proceeds as though the statute contains only the word “modify." See ante, at 13–15. It eventually gets around to the word "waive,” but similarly spends most of its time treating that word alone. See ante, at 1516. Only when that discussion is over does the majority in expresses doubt about that finding, though says that its skepticism plays no role in its decision. See ante, at 18-19, n. 6. Far better if the majority had ruled on that alternative ground. Then, the Court's invalidation of the Secretary's plan would not have neutered the statute for all future uses. But in any event, the skepticism is unwarranted. All the majority says to support it is that the current "paus[e]" on "interest accrual and loan repayments" could achieve the same end. Ibid. But the majority gives no reason for concluding that the pause would work just as well to ensure that borrowers are not "placed in a worse position financially in relation to" their loans because of the COVID emergency. §1098bb(a)(2)(A). How could it possibly know? And in any event, the majority's view of the statute would also make the pause unlawful, as later discussed. See infra, at 21. So the availability of the pause can hardly provide a basis for the majority's questioning of the Secretary's finding that cancellation is necessary.

Cite as: 600 U. S. (2023) 19 KAGAN, J., dissenting form the reader that the statute also contemplates the Secretary's addition of new terms and conditions. See ante, at 17-18. But once again the majority treats that authority in isolation, and thus as insignificant. Each aspect of the Secretary's authority—waiver, modification, replacement—is kept sealed in a vacuum-packed container. The way they connect and reinforce each other is generally ignored. “Divide to conquer" is the watchword. So there cannot possibly emerge “a fair construction of the whole instrument.” McCulloch v. Maryland, 4 Wheat. 316, 406 (1819). The majority fails to read the statutory authorization right because it fails to read it whole. See A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 167-169 (2012) (discussing the importance of the whole-text-here, really, the whole-sentence-canon). The majority's cardinal error is reading “modify" as if it were the only word in the statutory delegation. Taken alone, this Court once stated, the word connotes "increment" and means "to change moderately or in minor fashion." MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 225 (1994). But no sooner did the Court say that much than it noted the importance of "contextual indications." Id., at 226; see Scalia & Garner 167 (“Context is a primary determinant of meaning"). And in the HEROES Act, the dominant piece of context is that "modify" does not stand alone. It is one part of a couplet: "waive or modify." The first verb, as discussed above, means eliminate usually the most substantial kind of change. See supra, at 15; accord, ante, at 16. So the question becomes: Would Congress have given the Secretary power to wholly eliminate a requirement, as well as to relax it just a little bit, but nothing in between? The majority says yes. But the answer is no, because Congress would not have written so insane a law. The phrase "waive or modify" instead says to the Secretary: "Feel free to get rid of a requirement or, short of that, to alter it to the extent

20 BIDEN v. NEBRASKA KAGAN, J., dissenting you think appropriate." Otherwise said, the phrase extends from minor changes all the way up to major ones. The majority fares no better in claiming that the phrase "waive or modify" somehow limits the Secretary's ability "to add to existing law.” Ante, at 18 (emphasis in original). The majority's explanation of that idea oscillates a fair bit. At times the majority tries to convey that “additions" as a class are somehow suspect. See ante, at 17-18 (looking askance at “add[ing] new terms,” “adding back in,” “filling the empty space," "augment[ing],” and “draft[ing]_new” language). But that is mistaken. Change often (usually?) involves or necessitates replacements. So when the Secretary uses his statutory power to remove some conditions on loan cancellation, he can under that same power replace them with others. The majority itself must ultimately concede that point. See ante, at 13, 17-18. So it falls back on arguing that the “additions" allowed cannot be "substantial[]" because the statute uses the word "modify." Ante, at 16; see ante, at 17–18. But that just doubles down on the majority's most basic error: extracting "modify" from the "waive or modify" phrase in order to confine the Secretary to making minor changes. As just shown, the phrase as a whole says the opposite tells the Secretary that he can make changes along a spectrum, from modest to substantial. See supra, at 19. And so he can make additions along that spectrum as well. In particular, if he entirely removes existing conditions on loan discharge, he can substitute new ones; he does not have to leave gaping holes. Indeed, other language in the statute makes that substitution authority perfectly clear. As noted earlier, the statute refers expressly to "the terms and conditions to be applied in lieu of such [modified or waived] statutory and regulatory provisions." §1098bb(b)(2); see supra, at 16. In other words, the statute expects the Secretary's waivers and modifications to involve replacing the usual provisions with different ones. The majority rejoins that the “in lieu

Cite as: 600 U. S. (2023) 21 KAGAN, J., dissenting of" language is a “wafer-thin reed" for the Secretary to rely on because it appears in a “humdrum reporting requirement." Ante, at 17. But the adjectives are by far the best part of that response. It is perfectly true that the language instructs the Secretary to "include” his new "terms and conditions" when he provides notice of his "waivers or modifications." §1098bb(b)(2). But that is because the statute contemplates that there will be new terms and conditions to report. In other words, the statute proceeds on the premise that the usual waiver or modification will, contra the majority, involve adding “new substantive" provisions. Ante, at 17. The humdrum reporting requirement thus confirms the expansive extent of the Secretary's waiver/modification authority. The majority's opposing construction makes the Act inconsequential. The Secretary emerges with no ability to respond to large-scale emergencies in commensurate ways. The creation of any "novel and fundamentally different loan forgiveness program" is off the table. Ante, at 14. So, for example, the Secretary could not cancel student loans held by victims of the hypothetical terrorist attack described above. See supra, at 16-17. That too would involve "the introduction of a whole new regime” by way of "draft[ing] new substantive" conditions for discharging loans. Ante, at 17–18. And under the majority's analysis, new loan forbearance policies are similarly out of bounds. When COVID struck, Secretary DeVos immediately suspended loan repayments and interest accrual for all federally held student loans. See ante, at 5. The majority claims it is not deciding whether that action was lawful. Ante, at 18, n. 5. Which is all well and good, except that under the majority's reasoning, how could it not be? The suspension too offered a significant new benefit, and to an even greater number of borrowers. (Indeed, for many borrowers, it was worth much more than the current plan's $10,000 discharge.) So the

22 BIDEN v. NEBRASKA KAGAN, J., dissenting suspension could no more meet the majority's pivotal definition of "modify”—as make a “minor change[]”—than could the forgiveness plan. Ante, at 13. On the majority's telling, Congress thought that in the event of a national emergency financially harming borrowers-under a statute gearing potential relief to the measure of that harm, so that affected borrowers end up no less able to repay their loansthe Secretary can do no more than fiddle. He can, the majority says, "reduc[e] the number of tax forms borrowers are required to file." Ibid. Or he can "waive[] the requirement that a student provide a written request for a leave of absence." Ante, at 15. But he can do nothing that would ameliorate an emergency's economic impact on student-loan borrowers. That is not the statute Congress wrote. The HEROES Act was designed to deal with national emergencies—typically major in scope, often unpredictable in nature. It gave the Secretary discretionary authority to relieve borrowers of the adverse impacts of many possible crises-as “necessary" to ensure that those individuals are not “in a worse position financially" to make repayment. §1098bb(a)(2). If all the Act's triggers are met, the Secretary can waive or modify the usual provisions relating to student loans, and substitute new terms and conditions. That power extends to the varied provisions governing loan repayment and discharge. Those provisions are, indeed, the most obvious candidates for alteration under a statute drafted to leave borrowers no worse off, in relation to their loans, than before an emergency struck. But the majority will not accept the statute's meaning. At every pass, it "impos[es] limits on an agency's discretion that are not supported by the text." Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, 591 U. S. (2020) (slip op., at 16). It refuses to apply the Act in accordance with its terms. Explains the majority: "However broad the meaning of 'waive or modify" meaning however much power Congress gave the

Cite as: 600 U. S. (2023) 23 KAGAN, J., dissenting Secretary this program is just too large. Ante, at 18. B The tell comes in the last part of the majority's opinion. When a court is confident in its interpretation of a statute's text, it spells out its reading and hits the send button. Not this Court, not today. This Court needs a whole other chapter to explain why it is striking down the Secretary's plan. And that chapter is not about the statute Congress passed and the President signed, in their representation of many millions of citizens. It instead expresses the Court's own "concerns over the exercise of administrative power." Ante, at 19. Congress may have wanted the Secretary to have wide discretion during emergencies to offer relief to student-loan borrowers. Congress in fact drafted a statute saying as much. And the Secretary acted under that statute in a way that subjects the President he serves to political accountability the judgment of voters. But none of that is enough. This Court objects to Congress's permitting the Secretary (and other agency officials) to answer so-called major questions. Or at least it objects when the answers given are not to the Court's satisfaction. So the Court puts its own heavyweight thumb on the scales. It insists that "[h]owever broad" Congress's delegation to the Secretary, it (the Court) will not allow him to use that general authorization to resolve important issues. The question, the majority helpfully tells us, is "who has the authority” to make such significant calls. Ibid. The answer, as is now becoming commonplace, is this Court. See, e.g., West Virginia, 597 U. S.; Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U. S. (2021); see also Sackett v. EPA, 598 U. S. (2023) (using a similar judicially manufactured tool to negate statutory text enabling regulation). The majority's stance, as I explained last Term, prevents Congress from doing its policy-making job in the way it

24 BIDEN v. NEBRASKA KAGAN, J., dissenting thinks best. See West Virginia, 597 U. S., at (dissenting opinion) (slip op., at 13–19, 28–33). The new major-questions doctrine works not to better understandbut instead to trump-the scope of a legislative delegation. See id., at (slip op., at 32). Here is a fact of the matter: Congress delegates to agencies often and broadly. And it usually does so for sound reasons. Because agencies have expertise Congress lacks. Because times and circumstances change, and agencies are better able to keep up and respond. Because Congress knows that if it had to do everything, many desirable and even necessary things wouldn't get done. In wielding the major-questions sword, last Term and this one, this Court overrules those legislative judgments. The doctrine forces Congress to delegate in highly specific terms-respecting, say, loan forgiveness of certain amounts for borrowers of certain incomes during pandemics of certain magnitudes. Of course Congress sometimes delegates in that way. But also often not. Because if Congress authorizes loan forgiveness, then what of loan forbearance? And what of the other 10 or 20 or 50 knowable and unknowable things the Secretary could do? And should the measure taken-whether forgiveness or forbearance or anything else—always be of the same size? Or go to the same classes of people? Doesn't it depend on the nature and scope of the pandemic, and on a host of other foreseeable and unforeseeable factors? You can see the problem. It is hard to identify and enumerate every possible application of a statute to every possible condition years in the future. So, again, Congress delegates broadly. Except that this Court now won't let it reap the benefits of that choice. And that is a major problem not just for governance, but for democracy too. Congress is of course a democratic institution; it responds, even if imperfectly, to the preferences of American voters. And agency officials, though not them

Cite as: 600 U. S. (2023) 25 KAGAN, J., dissenting selves elected, serve a President with the broadest of all political constituencies. But this Court? It is, by design, as detached as possible from the body politic. That is why the Court is supposed to stick to its business-to decide only cases and controversies (but see supra, at 3–13), and to stay away from making this Nation's policy about subjects like student-loan relief. The policy judgments, under our separation of powers, are supposed to come from Congress and the President. But they don't when the Court refuses to respect the full scope of the delegations that Congress makes to the Executive Branch. When that happens, the Court becomes the arbiter-indeed, the maker-of national policy. See West Virginia, 597 U. S., at (KAGAN, J., dissenting) (slip op., at 32) ("The Court, rather than Congress, will decide how much regulation is too much"). That is no proper role for a court. And it is a danger to a democratic order. The HEROES Act is a delegation both purposive and clear. Recall that Congress enacted the statute after passing two similar laws responding to specific crises. See supra, at 14. Congress knew that national emergencies would continue to arise. And Congress decided that when they did, the Secretary should have the power to offer relief without waiting for another, incident-specific round of legislation. Emergencies, after all, are emergencies, where speed is of the essence. For similar reasons, Congress replicated its prior (two-time) choice to leave the scope and nature of the loan relief to the Secretary, so that he could respond to varied conditions. As the House Report noted, Congress provided “the authority to implement waivers" that were "not yet contemplated” but might become necessary to deal with "any unforeseen issues that may arise." H. R. Rep. No. 108-122, pp. 8–9 (2003). That delegation is at the statute's very center, in its “waive or modify" language. And the authority it grants goes only to the Secretary-the offi

26 BIDEN v. NEBRASKA KAGAN, J., dissenting cial Congress knew to hold the responsibility for administering the Government's student-loan portfolio and programs. See §1082. Student loans are in the Secretary's wheelhouse. And so too, Congress decided, relief from those loan obligations in case of emergency. That delegation was the entire point of the HEROES Act. Indeed, the statute accomplishes nothing else. The majority is therefore wrong to say that the “indicators from our previous major questions cases are present here." Ante, at 23 (internal quotation marks omitted). Compare the HEROES Act to other statutes containing broad delegations that the same majority has found to raise major-questions problems. Last Term, for example, the majority thought the trouble with the Clean Power Plan lay in the EPA's use of a “long-extant” and “ancillary” provision addressed to other matters. West Virginia, 597 U. S., at (slip op., at 20). Before that, the majority invalidated the CDC's eviction moratorium because the agency had asserted authority far outside its "particular domain." Alabama Assn. of Realtors, 594 U. S., at (slip op., at 6). I thought both those decisions wrong. But assume the opposite; there is, even on that view, nothing like those circumstances here. (Or, to quote the majority quoting me, those "case[s are] distinguishable from this one." Ante, at 23.) In this case, the Secretary responsible for carrying out the student-loan programs forgave student loans in a national emergency under the core provision of a recently enacted statute empowering him to provide student-loan relief in national emergencies.³ Today's decision thus moves the 3 The nature of the delegation here poses a particular challenge for JUSTICE BARRETT, given her distinctive understanding of the majorquestions doctrine. In her thoughtful concurrence, she notes the “importance of context when a court interprets a delegation to an administrative agency." Ante, at 2 (emphasis in original). I agree, and have said so; there are, indeed, some significant overlaps between my and JUSTICE

Cite as: 600 U. S. (2023) 27 KAGAN, J., dissenting goalposts for triggering the major-questions doctrine. Who knows by next year, the Secretary of Health and Human Services may be found unable to implement the Medicare program under a broad delegation because of his actions' (enormous) "economic impact." Ante, at 21. To justify this use of its heightened-specificity requirement, the majority relies largely on history: “[P]ast waivers and modifications,” the majority argues, “have been extremely modest." Ante, at 20. But first, it depends what you think is "past." One prior action, nowhere counted by the majority, is the suspension of loan payments and interest accrual begun in COVID's first days. That action cost the Federal Government over $100 billion, and benefited many more borrowers than the forgiveness plan at issue. See supra, at 21. And second, it's all relative. Past actions were more modest because the precipitating emergencies were more modest. (The COVID emergency generated, all told, over $5 trillion in Government relief spending.) In providing more significant relief for a more significant emergency—or call it unprecedented relief for an unprecedented emergency-the Secretary did what the HEROES Act contemplates. Imagine asking the enacting Congress: Can the Secretary use his powers to give borrowers more BARRETT's views on properly contextual interpretation of delegation provisions. See West Virginia, 597 U. S., at (dissenting opinion) (slip op., at 14-19). But then consider two of the contextual factors JUSTICE BARRETT views as "telltale sign[s]" of whether an agency has exceeded the scope of a delegation. Ante, at 12. First, she asks, is there a "mismatch[]" between a "backwater provision" or "subtle device" and an agency's exercise of power? Ibid. And second, is the agency official operating within or "outside [his] wheelhouse"? Ante, at 12-13. Here, for the reasons stated above, there is no mismatch: The broadly worded "waive or modify" delegation IS the HEROES Act, not some tucked away ancillary provision. And as JUSTICE BARRETT agrees, "this is not a case where the agency is operating entirely outside its usual domain." Ante, at 15. So I could practically rest my case on JUSTICE BARRETT's reasoning.

28 BIDEN v. NEBRASKA KAGAN, J., dissenting relief when an emergency has inflicted greater harm? I can't believe the majority really thinks Congress would have answered "no." In any event, the statute Congress passed does not say "no." Delegations like the HEROES Act are designed to enable agencies to “adapt their rules and policies to the demands of changing circumstances." FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 157 (2000). Congress allows, and indeed expects, agencies to take more serious measures in response to more serious problems. Similarly unavailing is the majority's reliance on the controversy surrounding the program. Student-loan cancellation, the majority says, “raises questions that are personal and emotionally charged,” precipitating “profound debate across the country." Ante, at 22. I have no quarrel with that description. Student-loan forgiveness, and responses to COVID generally, have joined the list of issues on which this Nation is divided. But that provides yet more reason for the Court to adhere to its properly limited role. There are two paths here. One is to respect the political branches' judgments. On that path, the Court recognizes the breadth of Congress's delegation to the Secretary, and declines to interfere with his use of that granted authority. Maybe Congress was wrong to give the Secretary so much discretion; or maybe he, and the President he serves, did not make good use of it. But if so, there are political remedies— accountability for all the actors, up to the President, who the public thinks have made mistakes. So a political controversy is resolved by political means, as our Constitution requires. That is one path. Now here is the other, the one the Court takes. Wielding its judicially manufactured heightened-specificity requirement, the Court refuses to acknowledge the plain words of the HEROES Act. It declines to respect Congress's decision to give broad emergency powers to the Secretary. It strikes down his lawful use of that authority to provide student-loan assistance. It

Cite as: 600 U. S. (2023) 29 KAGAN, J., dissenting does not let the political system, with its mechanisms of accountability, operate as normal. It makes itself the decisionmaker on, of all things, federal student-loan policy. And then, perchance, it wonders why it has only compounded the "sharp debates” in the country? Ibid. III From the first page to the last, today's opinion departs from the demands of judicial restraint. At the behest of a party that has suffered no injury, the majority decides a contested public policy issue properly belonging to the politically accountable branches and the people they represent. In saying so, and saying so strongly, I do not at all "disparage[]" those who disagree. Ante, at 26. The majority is right to make that point, as well as to say that “[r]easonable minds" are found on both sides of this case. Ante, at 25. And there is surely nothing personal in the dispute here. But Justices throughout history have raised the alarm when the Court has overreached when it has "exceed[ed] its proper, limited role in our Nation's governance." Supra, at 1. It would have been “disturbing," and indeed damaging, if they had not. Ante, at 25. The same is true in our own day. The majority's opinion begins by distorting standing doctrine to create a case fit for judicial resolution. But there is no such case here, by any ordinary measure. The Secretary's plan has not injured the plaintiff-States, however much they oppose it. And in that respect, Missouri is no different from any of the others. Missouri does not suffer any harm from a revenue loss to MOHELA, because the two entities are legally and financially independent. And MOHELA has chosen not to sue-which of course it could have. So no proper party is before the Court. A court acting like a court would have said as much and stopped. The opinion ends by applying the Court's made-up major

30 BIDEN v. NEBRASKA KAGAN, J., dissenting questions doctrine to jettison the Secretary's loan forgiveness plan. Small wonder the majority invokes the doctrine. The majority's "normal" statutory interpretation cannot sustain its decision. The statute, read as written, gives the Secretary broad authority to relieve a national emergency's effect on borrowers' ability to repay their student loans. The Secretary did no more than use that lawfully delegated authority. So the majority applies a rule specially crafted to kill significant regulatory action, by requiring Congress to delegate not just clearly but also microspecifically. The question, the majority maintains, is "who has the authority" to decide whether such a significant action should go forward. Ante, at 19; see supra, at 23. The right answer is the political branches: Congress in broadly authorizing loan relief, the Secretary and the President in using that authority to implement the forgiveness plan. The majority instead says that it is theirs to decide. So in a case not a case, the majority overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans. I respectfully dissent from that decision.

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Supreme Court student loan case: The arguments explained

The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan, which impacts millions of borrowers who could see their loans wiped away or reduced. (Feb. 27)

FILE - New graduates walk into the High Point Solutions Stadium before the start of the Rutgers University graduation ceremony in Piscataway Township, N.J., on May 13, 2018. The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan. It’s a plan that impacts millions of borrowers who could see their loans wiped away or reduced. (AP Photo/Seth Wenig, File)

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FILE- Light illuminates part of the Supreme Court building on Capitol Hill in Washington, Nov. 16, 2022. The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan. It’s a plan that impacts millions of borrowers who could see their loans wiped away or reduced. (AP Photo/Patrick Semansky, File)

FILE - President Joe Biden speaks about student loan debt relief at Delaware State University, Friday, Oct. 21, 2022, in Dover, Del. The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan. It’s a plan that impacts millions of borrowers who could see their loans wiped away or reduced. (AP Photo/Evan Vucci, File)

FILE - President Joe Biden speaks about the student debt relief portal beta test in the South Court Auditorium on the White House complex in Washington, Oct. 17, 2022. The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan. It’s a plan that impacts millions of borrowers who could see their loans wiped away or reduced. (AP Photo/Susan Walsh, File)

FILE - Graduates walk at a Harvard Commencement ceremony held for the classes of 2020 and 2021, May 29, 2022, in Cambridge, Mass. The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan. It’s a plan that impacts millions of borrowers who could see their loans wiped away or reduced. (AP Photo/Mary Schwalm, File)

WASHINGTON (AP) — The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan, which impacts millions of borrowers who could see their loans wiped away or reduced.

So far, Republican-appointed judges have kept the Democratic president’s plan from going into effect, and it remains to be seen how the court, dominated 6-3 by conservatives, will respond . The justices have scheduled two hours of arguments in the case Tuesday, though it will probably go longer . The public can listen in on the court’s website beginning at 10 a.m. EST.

Where things stand ahead of the hearing as well as what to expect:

HOW DOES THE FORGIVENESS PLAN WORK?

The debt forgiveness plan announced in August would cancel $10,000 in federal student loan debt for those making less than $125,000 or households with less than $250,000 in income per year. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.

College students qualify if their loans were disbursed before July 1. The plan makes 43 million borrowers eligible for some debt forgiveness, with 20 million who could have their debt erased entirely, according to the Biden administration.

The White House says 26 million people have applied for debt relief, and 16 million people had already had their relief approved. The Congressional Budget Office has said the program will cost about $400 billion over the next three decades.

HOW DID THE ISSUE WIND UP AT THE SUPREME COURT?

The Supreme Court is hearing two challenges to the plan. One involves six Republican-led states that sued. The other involves a lawsuit filed by two students.

A lower court dismissed the lawsuit involving the following states: Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. The court said the states could not challenge the program because they weren’t harmed by it. But a panel of three federal appeals court judges on the U.S. Court of Appeals for the 8th Circuit — all of them appointed by Republican presidents — put the program on hold during an appeal . The Supreme Court then agreed to weigh in .

The students’ case involves Myra Brown, who is ineligible for debt relief because her loans are commercially held, and Alexander Taylor, who is eligible for just $10,000 and not the full $20,000 because he didn’t receive a Pell grant. They say that the Biden administration didn’t go through the proper process in enacting the plan, among other things.

Texas-based U.S. District Judge Mark Pittman, an appointee of President Donald Trump, sided with the students and ruled to block the program. Pittman ruled that the Biden administration did not have clear authorization from Congress to implement the program. A federal appeals court left Pittman’s ruling in place, and the Supreme Court agreed to take up the case along with the states’ challenge.

HOW DID BIDEN GET TO CANCEL THE DEBT?

To cancel student loan debt, the Biden administration relied on the Higher Education Relief Opportunities for Students Act, commonly known as the HEROES Act. Originally enacted after the Sept. 11, 2001, terror attack, the law was initially intended to keep service members from being worse off financially while they fought in wars in Afghanistan and Iraq. Now extended, it allows the secretary of education to waive or modify the terms of federal student loans as necessary in connection with a national emergency.

Trump, a Republican, declared the COVID-19 pandemic a national emergency in March 2020, but Biden recently announced that designation will end May 11 . The Biden administration has said that the end to the national emergency doesn’t change the legal argument for student loan debt cancellation because the pandemic affected millions of student borrowers who might have fallen behind on their loans during the emergency.

WHAT ARE THE JUSTICES LIKELY TO ASK ABOUT?

Expect the justices to be focused on several big issues. The first one is whether the states and the two borrowers have the right to sue over the plan in the first place, a legal concept called “standing.” If they don’t, that clears the way for the Biden administration to go ahead with it. To prove they have standing, the states and borrowers will have to show in part that they’re financially harmed by the plan.

Beyond standing, the justices will also be asking whether the HEROES Act gives the Biden administration the power to enact the plan and how it went about doing so.

WHEN WILL BORROWERS KNOW THE OUTCOME?

It will likely be months before borrowers learn the outcome of the case, but there’s a deadline of sorts. The court generally issues all of its decisions by the end of June before going on a summer break.

Whether or not the debt gets cancelled, the case’s resolution will bring changes. While federal student loan payments are currently paused, that will end 60 days after the case is resolved . And if the case hasn’t been resolved by June 30, payments will start 60 days after that.

Follow the AP’s coverage of the U.S. Supreme Court at https://apnews.com/hub/us-supreme-court .

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Education loan repayment: a systematic literature review

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• Published: 05 October 2023

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• Rakshith Bhandary   ORCID: orcid.org/0000-0001-7994-0430 1 ,
• Sandeep S. Shenoy   ORCID: orcid.org/0000-0002-9848-9718 1 ,
• Ankitha Shetty   ORCID: orcid.org/0000-0002-1314-7322 1 &
• Adithya D. Shetty   ORCID: orcid.org/0000-0003-3062-2655 1  

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Education is a significant contributor to human capital. Financial assistance for education through institutional loan serves as the key element for human development, and loan repayment without default makes the education loan product self-sustainable. The systematic review aims to study the various articles related to education loan repayment (ELR) using bibliometric analysis approach and R studio software with the help of biblioshiny package. The study analyses 812 articles published in the Scopus database between 1990 and 2022. The review identifies most relevant authors, most cited articles, publication trends, keywords and themes, and trending topics. The review finds that research in the domain of ELR is at an increasing trend with a growth rate of 7.2% and, in the year 2022, the highest number of scientific publications, that is, 72 articles, was published. The review exhibits that existing research in the field has mainly focused on themes such as repayment burden, financial literacy, financial education, student debt, income, mental health, and loan defaults. The study concludes that highly cited work in educational loan repayment is in the field of medicine, highlighting salary as the key factor for educational loan repayment, and loan repayment is incentivized by the federal government to serve the designated underserved areas through service option loan repayment programs. Methods on designing and marketing new approaches to loan repayment can be researched in future with relation to human resource recruitment and retention by the employers.

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Introduction

Education loans (ELs) are an important source of financing for higher education. However, the increasing number of students’ relying on educational loans has emphasized the challenges associated with loan repayment. The concept of promoting ELs in India was first introduced in 2001 by the Indian Banks Association (IBA), which also designed the educational loan scheme. There are 864 universities, 40,026 schools, and 11,669 independent higher education institutions in India. 77.8 percentage of India's colleges are privately run, and majority are non-assisted colleges. In Indian higher education, the gross enrolment ratio (GER) is 25.2 percentage for 2016–2017, while globally, it ranges from 8 percentage in Africa to 75 percentage in Europe and North America (Nerkar and Dhongde 2018 ). Overall enrolment in Indian higher education is 1.9 crore boys and 1.6 crore girls as of 2018. The overall portfolio of ELs is about Rs. 80,000 crore, consisting mainly of scheduled commercial banks (contributing Rs. 73,000 crore), cooperative banks (Rs. 2000 crore), and non-banking financial corporations (Rs. 5000 crore) as mentioned by Nerkar and Dhongde ( 2018 ).

ELs sanctioned in India have declined by 25% over the past 5 years from 2015 to 2019 because default ratios have increased in education loan repayment (ELR). As on March 31, 2019, the sanctioned number of loans for education decreased from 3.34 to 2.5 lakh (Chitra 2019 ). The reason for the decline in ELs sanctioned is due to the increasing non-performing assets in the education loan (EL) portfolio of financial institutions. However, it may be noted that the total loan amount disbursed has increased by 34 per cent amounting to Rs. 22,550 crore in the fiscal year 2019 from Rs. 16,800 crore in the financial year 2015 (Chitra 2019 ), which indicates that banks are keen on funding high ticket education loans. Student loan borrowing is at its highest ever as of August 2022, with more than 45 million borrowers collectively owing $1.75 trillion student loan debt including private and federal loans in the USA, and the average borrowing per student is around $28,950. Federal student loan repayments have been paused, it is in forbearance from March 2020 owing to the COVID-19 Pandemic, and the repayment reprieve was set to expire in May 2022 (Hahn 2023 ).

The motive to review the study on factors affecting ELR is based on the value parameters for literature reviews written by Lim et al. ( 2022a ) that highlights necessity, importance, relevance, urgency, and contribution of literature reviews. This review gives insights to future researchers to identify gaps, avoid duplicative efforts in ELR by identifying the current state and progress in ELR. This study explains the benefits to new and established scholars with an updated understanding of the field of study, and the emerging fields in ELR, and its relevance to the journals scope. There are limited reviews on ELR, and past studies have limitations since they do not address the issues caused by covid-19 pandemic.

Mukherjee et al. ( 2022 ) mentioned theoretical contributions from science mapping and practical contributions from performance analysis for bibliometric analysis. In this study, theoretical contributions are presented by clarifying nomological networks to ELR factors, mapping social patterns to understand the social process supporting knowledge development in the field, and by tracking the declining, growing, and emerging topics. It also recognizes crucial knowledge gaps for future directions. Practical contributions of this study include reporting research productivity and impact in ELR, ascertaining reach for coverage claims, identifying social dominance or hidden biases, detecting anomalies for further examination, and evaluating relative performance. The aim of the paper is to systematically review the various articles related to ELR and the factors affecting repayment.

Literature review

Studies have found that ELs are widely available and offered by various financial institutions such as banks, non-banking financial companies, and educational institutions (Rani 2016 ). The factors affecting ELRs include interest rate, type of loan—mortgage-based or income contingent, loan amount, repayment period, and financial conditions of the borrower (Ganapathy et al. 2019 ). Moreover, the attitude of the borrower was found to influence ELR (Bhandary et al. 2023 ; Ismail et al. 2011 ). Several studies have identified the major challenges faced by borrowers in repaying their ELs. These challenges include high interest rates (Miller et al. 2019 ), low repayment capacities (Ganapathy et al. 2019 ), low levels of awareness (Ganapathy et al. 2019 ), lack of job opportunities (Dutta and Dey 2019 ), and the lack of effective loan management systems (Rani 2016 ). Borrowers with limited financial resources are often unable to repay their loans due to high interest rates, which can make it difficult for them to manage their finances (Chaudhary and Kaur 2018 ). In addition, lack of job opportunities makes it difficult for borrowers to repay their loans as they may not have a steady income (Dutta and Dey 2019 ).

EL programs vary across different countries in the world in terms of organizational structure, underlying objective, initial funding sources, loan application procedures, student coverage, and the collection methods (Ziderman 2004 ). Government-subsidized EL schemes are available in 70 countries across the world (Shen and Ziderman 2009 ). Prior research has suggested many factors in the background of educational loans, concerning non-repayment by borrowers. Such considerations include history of borrowers, amount of loan borrowed, instability of employment and wages, form of repayment, academic experience, institutional characteristics, income, and education of parents (Lochner et al. 2013 ). The same study mentioned financial instability as the biggest barrier to loan repayment. Rani ( 2016 ) suggested that scholarships, fees, grants, and ELs need to be re-evaluated in the context of increasing costs to design better schemes for higher education.

This study has implications for bank marketing for recouping the money spent on EL. Prospective authors can examine consumer behaviour towards banks and financial service providers as per the gap analysed by Kumar et al. ( 2022b ), and ways forward on personal financial management is encouraged given the impact of covid-19 pandemic on consumer finances. In the study by Baker et al. ( 2023 ), financial fragility is negatively associated with financial well-being, and loan repayment has implications on financial well-being of young adults. In the study by Tavares et al. ( 2023 ), individuals presented greater levels of financial literacy perception compared to actual knowledge of financial literacy. She et al. ( 2023 ) mentioned the lack of research articles in interventions to improve young adults’ financial well-being and found limited consensus on a conclusive measure for young adults’ financial well-being. Contributions of this study have implications on young adults’ financial well-being, safeguarding the financial well-being of young adults’ in areas such as financial fragility and financial literacy. The systematic review aims to evaluate and synthesize the existing research on EL programs in various countries around the world, with a focus on the current state of ELR, challenges faced by borrowers, and measures taken to overcome these challenges. Hence, we frame the following research questions.

What is the publication trend in ELR research?

Which are the most influential articles contributing to ELR research?

Who are the top prolific authors in ELR research?

What are the major themes and topics studied in ELR research?

What is the future scope of research in ELR research?

This systematic review uses bibliometric analysis using biblioshiny package in R Language to understand the trends in publication and to uncover the future research directions. Biblioshiny is a data visualization tool developed in R language by Aria and Cuccurullo ( 2017 ) to perform bibliometric analysis. The study follows the method of evidence informed management knowledge for systematic review (Tranfield et al. 2003 ). Eligibility and screening evaluation observed PICO (Participants, Interventions, Comparisons and Outcomes), and PRISMA (Preferred Reporting Items for Systematic Reviews and Meta Analysis) guidelines. The data collection stage encompassed selecting the database, extracting literature with inclusion- exclusion criteria, exporting the extracted data to biblioshiny, and filtering the articles. The data search was conducted on the Scopus database because of its large coverage as compared to web of science (Mongeon and Paul-Hus 2016 ).

The fundamental elements of literature reviews as independent studies are adopted from the guidelines prepared by Kraus et al. ( 2022 ) for systematic literature reviews. The interrogative approach of “what” “why” “when” “where” “who” and “how” prescribed by Paul et al. ( 2021 ) in Scientific Procedures and Rationales for Systematic Literature Reviews (SPAR-4-SLR) is used as a tool guide in this study. The bibliometric data were analysed using the three stage sensemaking approach of scanning the data, sensing the data and substantiating the findings developed by Lim and Kumar ( 2023 ).

The search string combinations and Boolean operators used are TITLE-ABSTRACT-KEYWORD ("education*" OR "student*" AND "loan*" OR "debt*" AND "payment*" OR "repayment*" OR "instalment*") AND PUBLICATION YEAR > 1989 AND PUBLICATION YEAR < 2023 AND (LIMIT-TO (PUBLICATION STAGE, "final")) AND (LIMIT-TO (DOCUMENT TYPE, "article") OR LIMIT-TO (DOCUMENT TYPE, "book chapter") OR LIMIT-TO (DOCUMENT TYPE, "review") OR LIMIT-TO (DOCUMENT TYPE, "conference paper") OR LIMIT-TO (DOCUMENT TYPE, "book")) AND (LIMIT-TO (LANGUAGE, "english")). Finally, 812 articles were extracted from Scopus in csv format and exported to biblioshiny for analysis. Articles, book chapters, reviews, conference papers, and books were included after excluding editorial letters, notes, and short surveys from the data in biblioshiny as shown in Fig.  1 . The inclusion exclusion criteria followed the PRISMA protocol introduced by Moher et al. ( 2009 ) and 38 records were included for the bibliometric study.

Review process for ELR research based on the PRISMA protocol

The study applied bibliometric analysis to provide an overview of the research in the field of ELR. Bibliometric analysis toolbox by Donthu et al. ( 2021 ) prescribes performance analysis and science mapping for bibliometric result analysis. Performance analysis techniques used in this study are descriptive analysis and citation analysis. The science mapping method included in our study is keyword co-occurrence analysis. The study results have been discussed in the below sections.

Annual scientific production

Figure  2 illustrates the research and publication trend from 1990 to 2022. The figure depicts rapid growth in the publication since 2009 and the compounded annual growth rate is 7.2%. From 1990 to 2006, there was a slow-paced growth in the research field. After 2009, there was a surge in publications demonstrating the growing interest among research scholars. The total number of publications ( n ) from 1990 to 2022 yielded 812 documents; 93.58% were published between 2009 and 2022. The year 2022 has the highest number of publications ( n  = 72). The statistics of annual scientific production show that ELR has emerged as a significant research theme.

Most relevant authors and authors’ impact

Figure  3 shows the most relevant authors. Chapman has published the highest number of documents (15 articles). The second highest work in ELR is done by Pathman, with 13 articles. Table 1 displays the top 20 most relevant authors, author impact, and total citations received. Ley has been cited more than 300 times. Chapman has the highest h -index of 9.

Most relevant authors

Citation analysis

The top 10 globally cited documents are given in Table 2 . The article by Ley and Rosenberg ( 2005 ) found that physician scientists play a crucial role in medical research and were declining in number with increased indebtedness of medical graduates due to rising tuition fees. The study highlights ELR as an obstacle to pursue medical research careers. Rosenblatt et al. ( 2006 ) found that the major barrier in physician recruitment to community health centres was low salaries and recruitment was heavily dependent on NHSC scholarships and state loan repayment programs. Loan repayment for community service in the designated shortage areas was used as an incentive to entice physicians to work in the underserved areas (Pathman et al. 2004 ). Medical residents reported symptoms of stress, depression, increased cynicism, and decreased humanism owing to their association with increased EL debt and sought for legislative relief from early loan repayment (Collier et al. 2002 ). State ELR programs for health workers return of service in underserved areas with minimum service requirements were found to alleviate health worker shortage in underserved areas (Barnighausen and Bloom 2009 ). Skillman et al. ( 2010 ) suggested loan repayment programs to be provided for increased participation in oral healthcare in rural America.

Education debt below $10,000 was found to support college completion and above $10,000 was found to reduce the likelihood of college completion (Dwyer et al. 2012 ) which indicates that amount of loan is a significant factor affecting ELR. In the study by Brown et al. ( 2016 ), it was found that mathematics and financial education among students improves loan repayment behaviour. Walsemann et al. ( 2015 ) studied the mental health of indebted young adults with student loan borrowings and found that the presence of student loans was associated with poor psychological functioning having possible spill over effects like occupational trajectories affecting loan repayment at a later stage. O'Neill et al. ( 2005 ) found that participation in credit counselling programs improves health and financial behaviours.

Word cloud analysis

Figure  4 displays the word cloud analysis, keywords such as higher education, student debt, financial literacy, financial education, human capital, financial aid, loan forgiveness, indebtedness, student loan default, and repayment burdens. Researchers can use these words to find the most relevant articles in ELR.

Co-occurrence network

The co-occurrence network shows the major themes related to student loans. In total, the co-occurrence analysis of keywords revealed six knowledge clusters. The explanation for each cluster is based on sensemaking. Sensemaking is a process of arranging keywords in clusters to convey a coherent narrative (Lim et al 2022b ; Kumar et al 2022a ). The six knowledge clusters are identified under.

Repayment burdens following higher education financing through student loans

The co-occurrence of keywords in cluster one investigates “repayment burdens” and “loan defaults” in “student loans” following “higher education financing”. The “policy” support and “financial aid” are also grouped together since they contribute towards “human capital”.

Loan repayment in pursuit of higher education

The “indebtedness” towards “student debt” and “loan repayment” in pursuit of “higher education” is grouped in cluster two.

Financial literacy through financial education

The third cluster examines “financial literacy” through “financial education” and its relation to “student loan debt”.

National health service corps healthcare support programs in service repayment options

The fourth cluster investigates “national health service corps” incentives, aid to “medical education” and “workforce” to contribute towards “rural health” and “primary care”.

Student debts and income

The sixth cluster examines the relation between “students” and various “debt” of students including “consumer credit” and the different sources of “income” while studying the course.

Student financial aid for educational finance

The sixth cluster examines the various “student financial aid” available to “finance education”.

The links between various clusters are highlighted to show the different areas of study and the interlink between them in Fig.  5 .

Thematic map

Co-word analysis of author keywords identifies trending topics in the field. The thematic map was analysed using the technique mentioned by Cobo et al. ( 2011 ). The trending topics in student loans are identified based on the central-density diagram. Figure  6 shows the four quadrants as per the clusters of keywords based on centrality and density along the X - and Y -axis that are discussed below.

Thematic map (co-word analysis)

Motor theme: The themes of the first quadrant are well-advanced with high centrality and density. There are few motor themes such as “national health service corps”, “workforce”, “loan repayment”, “education debt” and “career”.

Niche themes: Second quadrant themes are with high density and low centrality. They are well-developed and specialized themes but are minimal compared to the overall field. “Mental health” and “housing affordability” are the noted themes in this quadrant.

Peripheral themes: The third quadrant consists declining themes with low density and low centrality. This quadrant includes declining themes such as “financial inclusion”, “student financial aid” and “educational finance”.

Basic themes: These themes under the fourth quadrant have high centrality and low density. They include “student loan”, “higher education” and “student debt”.

Discussions and implications

Key implications are discussed based on the identified cluster of themes and the trending topics.

Scholarships and loan repayment programs by the federal government were mentioned as a prominent factor among medical professionals affecting the ELR program (Ley and Rosenberg 2005 ; Rosenblatt et al. 2006 ). Citation analysis in educational loan repayment in the field of medicine highlighted “salary” as the key factor for ELR, and repayment had to be incentivized by the federal government to serve in the designated underserved areas by service option loan repayment programs (Barnighausen and Bloom 2009 ; Collier et al. 2002 ; Ley and Rosenberg 2005 ; Pathman et al. 2004 ; Rosenblatt et al. 2006 ; Skillman et al. 2010 ). Several states offered financial incentives and ELR programs for healthcare education (Pathman et al. 2013 ).

National Health Service Corps (NHSC) offers student loan repayment programs for physician assistants and nurse practitioners in exchange for 2 years of service with an option to renew the contract after 2 years (Pathman et al. 2014 ). The loan repayment programs (LRP) of the National Health Service Corps (NHSC) have provided critical recruitment and retention incentives (Pathman et al. 2022 ), and the NHSC LRP experience by clinicians in all domains was generally positive (Pathman et al. 2019 ).

Brown et al. ( 2016 ) found that financial and mathematical education improves repayment behaviour of students. It can be inferred that financial education is a factor affecting ELR. Bhatia and Singh ( 2023 ) reported that acquiring financial knowledge and developing positive financial attitude and adopting healthy financial behaviour are important to attain financial well-being. Anand and Mishra ( 2022 ) constructed a nonlinear model using vector machine classifier that classifies potential customers into good and bad class, based on their positive and negative savings behaviour, and concluded that behavioural characteristics along with income level and financial literacy can be used to understand financial distress among millennials. Steep instalment plans which have higher initial repayments as compared to flat instalment plans increase the borrowers focus on making repayments as per the study by Dezső et al. ( 2022 ) which implies instalment plan as a factor affecting ELR.

Mental health of young adults was affected by student loan borrowing having possible spillover effects that affect loan repayment (Walsemann et al. 2015 ). Income contingent loan reforms were suggested by Chapman ( 2006 ) as a much-needed reform in higher education financing. He studied the various income contingent loan repayment schemes in Yale, Sweden, Australia, Sweden, New Zealand and The Republic of South Korea and found that income contingent scheme is a factor that positively supports ELR as compared to mortgage-based loan repayment programs. Borrowing is considered less risky and reduces the impact of loan aversion by participants in the income contingent loan repayment method when compared to mortgage style repayments (Boatman et al. 2022 ). Income contingent repayment methods reduce the financial hardships of borrowers as compared to mortgage-based repayment systems (Barr et al. 2019 ; Cai et al. 2019 ; Chapman and Dearden 2017 ). Simulated EL scheme models for Brazil (Dearden and Nascimento 2019 ) and Ireland (Chapman and Doris 2019 ) favoured income contingent schemes as compared to mortgage-based schemes by reducing the repayment burden on borrowers.

Perception of service quality in banks improves by enhancing customer satisfaction and customer engagement (Ananda et al. 2022 ), which implies that EL borrowers’ engagement with bankers, and increase in borrowers’ satisfaction level with EL service providers improves borrowers’ perception of banks service quality. The study by Zwier ( 2021 ) suggests practitioners to add insurance-based marketing in their products marketing mix to create value added products. On similar lines, insurance-based marketing can be applied to add value in marketing ELs. Educational courses contribute significantly in providing financial resources to the universities as compared to conferences, seminars, consultancy and scientific research (AL-Ghaswyneh 2020 ). The study suggests universities to give more attention to educational courses in their university plans and policies to increase the financial resources implying universities to market ELs along with other stakeholders to increase the universities financial resources.

In the article by Dwyer et al. ( 2012 ), the quantum of loan was a significant factor affecting ELR. The article mentioned the threshold loan amount in the USA as $10,000, above which, loan repayment was likely to be defaulted by non-completion of the course. Banks should strengthen their human capital efficiency and structure capital efficiency should be taken into consideration to strengthen their competitive advantage and gain higher market share (Van Nguyen and Lu 2023 ). In the same study, it was found that intellectual capital fosters the competitive nature of banks and ensures growth and development of banks. EL schemes for developing human capital with service repayment options by banks have to be designed and marketed for students with high intellectual capabilities willing to serve the banks in order to strengthen the banking industry. EL products can be tailor made with partial or full repayment waivers and used as a recruitment tool by banks for students identified with proven intellectual capabilities and commitment to serve the banking sector for a certain duration.

Contributions of our study also have implications on young adults’ financial well-being and safeguarding the financial well-being of young adults’ including areas such as financial fragility and financial literacy.

Ways forward

The contribution of NHSC towards healthcare in underserved areas can be studied further to quantify the healthcare development of underserved areas. The threshold amount of the loan, above which, the repayment is likely to be defaulted, can be studied in developed, developing and under developed countries. Mental health of young adults with student loan borrowing can be researched further in different fields of study other than medicine. Cost–benefit analysis on borrowers who availed mortgage-based repayment, with borrowers who availed income contingent repayment can be researched. Safeguarding the financial well-being of young adults can be studied to explore the relationship of financial literacy and financial fragility with the well-being of student loan borrowers.

Future research can focus on designing new approaches to loan repayment that can be used as a tool for human resource recruitment and retention by the employers, with employers paying a part or full amount of the loan based on the tenure of service. Further research is needed to find innovative design and implementation techniques in mortgage-based and income contingent payment methods.

Conclusions

Key takeaways.

This review aimed at studying the factors affecting ELR by systematically reviewing articles and using technology powered solutions to visualize the output with the help of R studio. This study provides an overview of the current state of ELR and the challenges faced by borrowers in repaying their loans. The review highlights the measures taken to overcome these challenges, such as implementing effective loan management systems, increasing awareness about the loan repayment process, and providing job opportunities to borrowers. ELR in the field of medicine highlights salary as the key factor for educational loan repayment and repayment must be incentivized by the government to work in the designated underserved areas by service option loan repayment programs. EL needs to be marketed by universities to increase their financial resources. EL can be custom designed based on identified intellectual capabilities of borrowers and marketed by banks to increase the human capital and recruit the intellectuals with service repayment options by employers to strengthen the banking industry. Insurance can be coupled and marketed with EL as a value-added product for the beneficiaries. In sum, this technology-enabled systematic literature review using R studio on ELR from articles indexed in Scopus database has delivered on its research objectives and its specific research questions pertaining to the performance analysis and science mapping of the field.

Limitations and future review directions

This review has the following limitations. The bibliometric data are retrieved from a single database, that is, Scopus. Though the usage of Scopus is justified as per prior studies (Donthu et al. 2021 ; Lim et al. 2022b ), the study cannot completely discount the possibility of uncovering new insights on ELR documents indexed in other databases like web of science. Thus, future review can focus on ELR articles using web of science as a cross-check mechanism to either support or contradict the generalizability of the findings in this review.

This study uses bibliometric analysis techniques such as performance analysis and science mapping. Though this review accomplishes the listed objectives, it is important to note that other types of reviews can still be conducted. In this regard, future research can consider analysing using new science mapping methods and performance analysis techniques. This study uses R studio for Bibliometric analysis. The bibliometric studies in future research can focus on using other data visualization software applications such as VOSviewer and Gephi by combining bibliometric analysis with network visualization software (Donthu et al. 2021 ).

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Bhandary, R., Shenoy, S.S., Shetty, A. et al. Education loan repayment: a systematic literature review. J Financ Serv Mark (2023). https://doi.org/10.1057/s41264-023-00248-2

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• Education loan repayment
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What Is an Education Loan?

How an education loan works, types of education loans, special considerations, what type of debt are student loans, what are the four major types of educational loans, what are three effective techniques for managing student loan debt.

• Student Loans

Education Loan: Definition, Types, Debt Strategies

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An education loan is a sum of money borrowed to finance post-secondary education or higher education-related expenses. Education loans are intended to cover the cost of tuition, books and supplies, and living expenses while the borrower is in the process of pursuing a degree. Payments are often deferred while students are in college and, depending on the lender, for an additional six-month period after earning a degree. This deferment period is also referred to as a "grace period."

Key Takeaways

• An education loan is a sum of money borrowed to finance post-secondary education or higher education-related expenses.
• Education loans are intended to cover the cost of tuition, books and supplies, and living expenses while the borrower is in the process of pursuing a degree.
• Payments are often deferred while students are in college and, depending on the lender, sometimes they are deferred for an additional six-month period after earning a degree.

Although there are a variety of education loans, they can be broken down generally into two basic types: federal loans (sponsored by the federal government) and private loans.

Education loans are issued for the purpose of attending an accredited college or a university to pursue an academic degree. Education loans can be obtained from the government or through private-sector lending sources. Federal loans often offer lower interest rates, and some also offer subsidized interest (meaning the United States Department of Education pays the interest on the loan while a student is in college at least half-time). Private-sector loans generally follow more of a traditional lending process for applications, with rates that are typically higher than federal government loans.

Federal student loans

Most borrowers first seek federal government financing if they need to borrow funds for education expenses. The first step in seeking education loans through the federal government is to complete a Free Application for Federal Student Aid (FAFSA). Depending on the applicant's status, particularly in regard to their parental dependency, additional information may be required to complete the application. A credit check is not generally required as part of the application process. The amount of principal on the loan or loans is primarily based on the cost of attendance at the school the student is planning on attending. Once a FAFSA form is completed, the schools listed on the FAFSA application work to identify the financial aid package that the student is eligible for.

Various types of federal student loans exist, including direct subsidized, direct unsubsidized , and direct consolidation loans. If offered and accepted, funds will be issued by the federal government to the specified university to cover the student's academic costs. If there are remaining funds available, they will be disbursed to the student. A student may use these funds to cover other expenses that they incur while pursuing a degree. If a student qualifies for subsidized loans, the borrower’s interest will be covered while they are in school. If a student qualifies for unsubsidized loans, the interest on their loans will be deferred as long as they are enrolled in classes and remain in good academic standing.

Private student loans

In some cases, the student loan package that a student is issued through the federal government may suggest that the borrower applies for additional funds through private lenders. Private student loans also include state-affiliated lending nonprofits and institutional loans provided by the schools. These types of loans will generally follow a more standard application process (like what is typical of any private-sector loan). Applications for private student loans typically require a credit check.

Borrowers can apply directly to individual private-sector lenders for funds. Similar to federal funds, the approved amount will be influenced by the school a borrower is attending. If approved, funds for educational expenses will first be disbursed to the school to cover any pending bills; the remaining amount is then sent directly to the borrower.

Accumulated debt from college can be an overwhelming burden after graduation. If a student has taken out numerous education loans, consolidating them can be a good option for more easily managing the debt load. Multiple federal education loans can be combined into a single direct consolidation loan. Also, many private lenders now allow borrowers to combine both their federal and private loans into one loan. It's important to note that in this scenario, the new loan will be a private one because it will be issued by a private lender. Because the loan will be considered a private loan, the debt will no longer be eligible for certain federal programs for loan forgiveness and repayment. There is no option for borrowers to combine private and public loans into a new public loan.

A number of employers are also beginning to integrate consolidation services and student loan payment benefits into their employee benefit programs as a way of helping to increase the support available for managing student loan debt after college.

Students and their families should consider all of their options before signing up for higher education loans that could become a crushing burden in the future. Some alternatives to—or ways to reduce the size of—loans include working part-time, accepting work-study offers, attending a less expensive school, finding a job that offers tuition reimbursement as a benefit, and applying for scholarships that help to cover the cost of tuition and room and board. When the student has graduated, it also helps to search for a job that offers help with student debt as a benefit.

Sometimes, you may have more funds from student loans than you need to pay for your education. Perhaps a relative gifted money to your college account, or you received a scholarship that you hadn't planned to receive. It's tempting to use excess student loan funds for, well, fun, but the ethical and financially sound approach is to apply the funds back to your debt. Also, in the case of government-subsidized loans, you could face legal action if you misuse the funds.

Student loans are considered unsecured installment debts, meaning there isn't a physical asset tied to them, and they're paid back in a set number of installments over an agreed-upon period of time .

There are four types of federal student loans available as part of the William D. Ford Federal Direct Loan Program:

• Direct Subsidized Loans: Loans made to eligible undergraduate students who demonstrate a clear financial need.
• Direct Unsubsidized Loans: Loans made to eligible undergraduate, graduate, and professional students (eligibility isn't based on financial need).
• Direct PLUS Loans: Loans made to graduate or professional students and parents of dependent undergraduate students to pay for education expenses not covered by other financial aid (eligibility isn't based on financial need, though a credit check is required). Borrowers with a poor credit history must meet additional requirements.
• Direct Consolidation Loans: Loans that allow you to combine your eligible federal student loans into a single loan with one loan servicer.

There are several ways to better manage student debt . Three particularly useful strategies include paying off loans with the highest interest rates first, paying down extra principal whenever possible, and exploring operations for debt forgiveness.

Federal Student Aid. " The U.S. Department of Education Offers Low-Interest Loans to Eligible Students to Help Cover the Cost of College or Career School ."

Federal Student Aid. " Complete the FAFSA® Form ."

Federal Student Aid. " I Filled Out My FAFSA Form. When Can I Expect to Receive Information About My Financial Aid? "

Federal Student Aid. " Federal Student Loans for College or Career School Are an Investment In Your Future ."

Federal Student Aid. " Consolidating Your Federal Education Loans Can Simplify Your Payments, But It Also Can Result In the Loss of Some Benefits ."

Consumer Financial Protection Bureau. " Should I Consolidate or Refinance My Student Loans? "

Equifax. " What Are the Different Kinds of Debt? "

Federal Student Aid. “ William D. Ford Federal Direct Loan Program .”

Federal Student Aid. " Federal Student Loans for College or Career School Are an Investment in Your Future ."

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Department of Education v. Brown

Holding : Respondents lack Article III standing to assert a procedural challenge to the student-loan debt-forgiveness plan adopted by the Secretary of Education pursuant to Higher Education Relief Opportunities for Students Act of 2003.

Judgment : Vacated and remanded , 9-0, in an opinion by Justice Alito on June 30, 2023.

SCOTUSblog Coverage

• Supreme Court strikes down Biden student-loan forgiveness program (Amy Howe, June 30, 2023)
• Biden’s student-loan forgiveness plan gets cold reception from conservative justices (Amy Howe, February 28, 2023)
• When the president takes lawmaking matters into his own hands, the court must step in (Elizabeth Slattery, February 23, 2023)
• From precarious to dire: The financial state of student-loan borrowers following the COVID-19 pandemic (Randi Weingarten, February 23, 2023)
• Don’t let the executive abuse emergency powers to raid the Treasury (Ilya Somin, February 21, 2023)
• Partisan priorities and institutional legitimacy in the flawed challenges to student-debt relief (Jonathan D. Glater, February 21, 2023)
• In a pair of challenges to student-debt relief, big questions about agency authority and the right to sue (Amy Howe, February 13, 2023)
• How ending the COVID emergency will complicate the fight over student-loan forgiveness (James Romoser, February 6, 2023)
• Court schedules February arguments on student-loan relief, tech companies’ liability (Amy Howe, December 19, 2022)
• Court adds second challenge to Biden’s student-loan relief plan (Amy Howe, December 12, 2022)

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Is the Eighth Circuit Ruling the End of the Road for Student Debt Forgiveness?

Last year, the U.S. Supreme Court invalidated President Joe Biden’s program of student debt forgiveness. In Biden v. Nebraska the Court’s six Republican appointees granted standing to a state-created loan-processing corporation in Missouri that goes by the acronym MOHELA. Those same Justices then ruled that the statute the administration invoked—which goes by the acronym the HEROES Act—did not authorize the program. All three Democratic appointees dissented on both grounds.

The Biden administration did not give up. Instead, it invoked different statutory authorities to create a new student debt forgiveness plan, known by the acronym SAVE. Once again, Republican-led states sued, and last week, once again, Republican-appointed jurists found that MOHELA had standing and that the Biden administration had asserted power that Congress had not delegated to it. This time the blow came from a three-judge panel of the U.S. Court of Appeals for the Eighth Circuit consisting of an appointee of former President George W. Bush and two appointees of former President Donald Trump.

As a technical matter, last week’s Eighth Circuit decision in Missouri v. Biden only granted interim relief from a federal district court order that partially blocked but partially allowed SAVE to go into effect. As a practical matter, however, it means that no substantial student debt forgiveness program will operate during the duration of the Biden administration or, should Vice President Kamala Harris become President in January, during her administration either—at least not without new legislation.

The Eighth Circuit Leverages the Roberts Court’s Assault on the Administrative State

The Eighth Circuit found that MOHELA has standing because the Supreme Court did. That’s fair enough, but why did it find that the state plaintiffs were likely to succeed on the merits, given that SAVE relied on different statutory authority than the program invalidated by the Supreme Court last year relied?

The Eighth Circuit held that the primary statute the administration invoked to support SAVE—which allows for borrowers to take advantage of “an income contingent repayment plan, with varying annual repayment amounts based on the income of the borrower, paid over an extended period of time prescribed by the Secretary” of Education—is best read not to authorize the effective zeroing out of principal and interest payments, given that other parts of the same statute expressly authorize loan forgiveness in specific contexts.

That’s a plausible reading, to be sure, but it is not the only plausible reading of the statute. If the case had been decided at almost any time in the last 40 years, under the so-called Chevron deference doctrine, the Eighth Circuit might have been required to defer to the Department of Education’s reasonable interpretation of a statute it is charged with administering. But the court did not have to worry about the issue at all, because on June 28 of this year the Court—in another ideologically divided 6-3 decision —overruled the Chevron deference doctrine.

Meanwhile, the Eighth Circuit expressly invoked a different principle that the Roberts Court has fashioned to hamstring effective regulation. Under the “major questions doctrine,” an agency needs very clear statutory authorization from Congress in order to take actions of major “economic and political significance.” Although the major questions doctrine has antecedents in older cases, in recent years, the Court has repeatedly invoked and inflated it, including in its 2023 decision invalidating the earlier student debt forgiveness program. Because the kinds of regulation that give rise to litigation will typically involve billions of dollars, it is hard to identify  any regulation that finds its way into court that cannot be said to involve a major question, thus licensing judges and Justices who are hostile to regulation to say that Congress did not speak sufficiently clearly to grant the power the agency in question has asserted.

What comes next? The Biden administration could appeal the Eighth Circuit decision to the Supreme Court. However, the Court might choose not to intervene, and even if it did, it is highly unlikely that it would rule before the end of President Biden’s term. If Trump becomes President again, he will surely terminate SAVE. If Harris becomes President, she could continue such an appeal, but to what end? The Court is very unlikely to reverse the Eighth Circuit. Whatever else one might say about the Eighth Circuit’s ruling, it is faithful to the approach taken by the SCOTUS conservative super-majority.

New legislation from Congress could either directly grant student debt relief or very clearly authorize the Department of Education to grant such relief. For that to happen would require Harris to take office as President and Democrats to win both houses of Congress. Even then, without changing the filibuster rule, there would be little chance of a major student debt forgiveness package passing.

Indeed, it is possible to imagine even some Democrats voting against student debt forgiveness. The Biden administration has been careful to tailor its debt relief programs to those with the greatest economic need. But even so, there are legitimate reasons why progressives might oppose student debt forgiveness. People who paid out of pocket for college but are not making much money and others who never went to college can claim that they are equally if not more entitled to financial assistance. And student debt forgiveness without any attempt to address the cost of higher education is at best a temporary fix to a systemic problem.

Those are policy questions. The Supreme Court and Eighth Circuit decisions invalidating the Biden efforts to provide student debt forgiveness purport to be rooted in law—in the parsing of the statutes Congress enacted delegating power to the Department of Education. Given the ideological breakdown on these matters, however, it is nearly impossible to avoid the conclusion that the drivers of the decisionmaking by the Republican appointees to the federal bench are some combination of hostility to student debt forgiveness and hostility to the exercise of power by administrative agencies more broadly.

In the wake of last week’s Eighth Circuit ruling, people struggling to buy a home or even to make ends meet because of substantial student debt will no doubt be angry. It would be a shame if they direct that anger at the Biden/Harris administration, because the true culprit is the Republican-packed judiciary.

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by Laurence H. Tribe and Michael C. Dorf

by Michael C. Dorf

by Michael C. Dorf with Trevor W. Morrison

by Jesse Choper, Richard Fallon Jr., Yale Kamisar, Steven Shiffrin, Michael Dorf, Frederick Schauer

Millions of student-loan borrowers are getting new details on qualifying for Biden's broader debt cancellation plan coming this fall

• The Education Department is moving forward with its broader student-loan forgiveness plan.
• It released new details on qualifying for the relief, set to be implemented this fall.
• It also sent emails to borrowers last week informing them of the August 30 deadline to opt out.

The Education Department is getting closer to delivering student-loan forgiveness to millions of borrowers.

Last week, the department announced it would be sending emails to all student-loan borrowers with at least one outstanding federal loan to update them on President Joe Biden's plan to cancel student debt using the Higher Education Act of 1965.

Expected to benefit more than 30 million borrowers, the plan would cancel some or all student debt for:

• Borrowers who owed more than they did when they first entered repayment
• Borrowers who entered repayment at least 20 years ago
• Borrowers who would be eligible for forgiveness through programs like Public Service Loan Forgiveness or income-driven repayment but haven't yet applied
• And borrowers who attended schools that left them with too much debt compared to post-graduation earnings.

The emails sent last week also specified an August 30 deadline for borrowers to opt out of the relief by contacting their servicers. They may choose to opt out for a number of reasons, including avoiding potential state tax liabilities.

Along with the emails, the department recently updated its guidance on Federal Student Aid with more information on qualifying for this relief. Specifically, the department says that only borrowers who have "entered repayment on at least one of their loans when the debt relief is applied" would be "eligible for forgiveness on the loan(s) in repayment."

Related stories

This means that borrowers with federal subsidized and unsubsidized loans are considered to have entered into repayment once their grace period ends, typically six months after they finish school. Borrowers with PLUS loans are considered to have entered repayment when their loans are fully disbursed.

Once the department finalizes its rules, it's set to begin implementing the relief in the fall, and unless a borrower wishes to opt out, they don't need to take any action to qualify.

For borrowers enrolled in an income-driven repayment plan at the time of the relief, if they earn less than $120,000 a year individually or $240,000 as a married couple filing jointly, the amount of their current balance that is greater than their original balance would be forgiven under the proposed rule.

Borrowers not enrolled in an income-driven repayment plan would qualify for $20,000 in relief or the amount of their current balance that's greater than what they originally borrowed, whichever is smaller.

While the department is continuing to move forward with the finalization, the relief will probably run into legal challenges that could halt or block the plan.

Are you hoping to benefit from Biden's student-loan forgiveness plan? Will it influence your vote in the election? Share your story with this reporter at [email protected] om .

Watch: Why student loans aren't canceled, and what Biden's going to do about it

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Keep an eye on your inbox: 25 million student loan borrowers to get email on forgiveness

Keep a sharp eye on your email inbox in the coming days and weeks, student loan borrowers. Buried amongst the spam mail and coupons may be the latest information on debt forgiveness.

The Biden administration has taken its next steps toward a solution for borrowers after his initial forgiveness plan was struck down in the Supreme Court in June 2023. The new initiative could provide relief for millions of Americans and even total cancelation of repayment for some.

Originally announced back in April, the White House said that , if implemented as proposed, the plan "would bring the total number of borrowers getting relief under the Biden-Harris Administration to more than 30 million."

Now, roughly 25 million borrowers are expected to receive emails with the next steps starting this week, the U.S. Department of Education announced on Wednesday.

“Starting tomorrow, the U.S. Department of Education will begin emailing all borrowers with at least one outstanding federally held student loan to provide updates on potential student debt relief,” the department said in an announcement.

The emails will also provide information on how to opt out if they do not want to receive relief. People looking to opt out will have until Aug. 30 to contact their loan servicer and will not be able to opt back in, according to the department. They will also be temporarily opted out of forgiveness due to enrollment in income-driven repayment plans until the department can automatically assess their eligibility for further benefits.

Eligible Americans will receive a follow-up email with additional information after the rules of eligibility and forgiveness are finalized in the fall.

"The rules that would provide this relief are not yet finalized, and the email does not guarantee specific borrowers will be eligible," the announcement also warned.

Student loan forgiveness: What Kamala Harris has said (and done) about student loans during her career

How will be eligible for relief?

Under the rules drafted in April, the Biden administration named four specific classes of borrowers who would be eligible for relief under the proposed plan. These include:

◾ Borrowers who owe more now than they did at the start of repayment.  Borrowers would be eligible for relief if they have a current balance on certain types of Federal student loans that is greater than the balance of that loan when it entered repayment due to runaway interest. The Department of Education estimates that this debt relief would impact nearly 23 million borrowers, the majority of whom are Pell Grant recipients.

◾ Borrowers who have been in repayment for decades.  If a borrower with only undergraduate loans has been in repayment for more than 20 years (received on or before July 1, 2005), they would be eligible for this relief. Borrowers with at least one graduate loan who have been in repayment for more than 25 years (received on or before July 1, 2000) would also be eligible.

◾ Borrowers who are otherwise eligible for loan forgiveness but have not yet applied.  If a borrower hasn’t successfully enrolled in an income-driven repayment (IDR) plan but would be eligible for immediate forgiveness, they would be eligible for relief. Borrowers who would be eligible for closed school discharge or other types of forgiveness opportunities but haven’t successfully applied would also be eligible for this relief.

◾ Borrowers who enrolled in low-financial value programs . If a borrower attended an institution that failed to provide sufficient financial value, or that failed one of the Department of Education's accountability standards for institutions, those borrowers would also be eligible for debt relief.

“No application will be needed for borrowers to receive this relief if these plans are implemented as proposed,” said the announcement.

U.S. Secretary of Education Miguel Cardona said in a statement that the current administration made a commitment to deliver relief to followers and the department nearing the "end of the lengthy rulemaking process," leading them "one step closer to keeping that promise.”

“Today, the Biden-Harris administration takes another step forward in our drive to deliver student debt relief to borrowers who’ve been failed by a broken system,” he said. “These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others."

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Borrowers Discuss the Challenges of Student Loan Repayment

Focus group participants express gratitude for their education, frustration over unaffordable payments and rising balances.

• Borrowers Discuss the Challenges of Student Loan Repayment (PDF)

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In a 2019 poll conducted by the opinion and market research company SSRS for The Pew Charitable Trusts, 7 in 10 Americans said that taking out a student loan is a reasonable choice given the benefits of a college degree, but 89 percent also expressed concern about people’s ability to repay those debts. And they have reason to worry: Nearly 20 percent of the nation’s 43 million federal student loan borrowers are in default—which is typically defined as having gone at least 270 days without a payment—and millions more are behind on their payments. 1

Research has provided insight into the characteristics of borrowers who have the most difficulty repaying their student loans, but less is known about why they struggle and about their personal experiences with the repayment process. This knowledge gap makes it difficult for policymakers to get a full picture of why some people successfully navigate the repayment system while others fall off track, or to readily identify which current policies might not be working as intended and what reforms are needed to better support borrowers.

This report seeks to illuminate these issues by analyzing the responses provided during 16 focus groups, conducted by Pew in eight cities with more than 150 student loan borrowers, in late 2018 and early 2019. The researchers sorted participants into four categories, based on self-reported information about their experiences in repayment (see “About the Analysis” and Appendix B for more information): People who were on track to repay their student loans; those who were not on track to repay, regardless of the size of their balances ( general , off track ); those who were off track and had balances of $40,000 or more ( high balance, off track ); and people who were off track and had balances of $10,000 or less ( low balance, off track ). The research team conducted four focus groups with each category of borrower.

Taken together, these focus groups suggest that many participants found the repayment system difficult to navigate, experienced a number of challenges paying down their loans, and did not receive—or were not able to access—prompt and sustained relief, especially when they were financially stressed. Borrowers in these groups experienced a level of anxiety and frustration about their balance sheets. For example, they felt like they could not get ahead on their payments and were forced to make difficult trade-offs to manage their finances. Those who struggled to access longer-term solutions turned instead to shorter-term ones.

Key themes that emerged from the focus groups include:

• Financial instability was the biggest barrier to repayment among off-track borrowers . Across off-track categories, borrowers reported wanting, but being unable, to make payments because of other financial difficulties, including unexpected expenses that created ripple effects through their personal balance sheets. These borrowers said they had limited resources and needed to cover costs for transportation, housing, child care, and groceries before paying student loans. Among low-balance, off-track borrowers, these trade-offs were especially severe, and far fewer people in this group reported making payments than other off-track borrowers.
• Off-track borrowers typically had difficulty early in repayment . Many reported not feeling prepared to manage repayment and instead learning through trial and error. As a result, some off-track borrowers said they first interacted with their servicers when the servicer reached out after they missed payments. For some, an unexpectedly large first bill, compounded by other financial difficulties, may have contributed to missing payments early in the process.
• Borrowers consistently faced challenges understanding, enrolling in, and remaining in income-driven plans . Certain repayment plans, known as income-driven plans, calculate monthly payments based on borrowers’ incomes and family sizes. Focus group participants in all categories said the complex application and annual recertification processes for these plans made it difficult to take full advantage of these options. And though a recently passed federal law has the potential to help streamline enrollment in income-driven plans, other challenges remain. Some participants also reported that they did not know about income-driven plans or said that their payments were or still would be unaffordable, primarily because those borrowers’ incomes were volatile or because the plans did not adequately account for other aspects of their balance sheets, such as expenses.
• Borrowers of all types paused payments, and many did so for far longer than they had initially planned . Borrowers reported that using deferments and forbearances—tools that allow borrowers to postpone or suspend their payments—was easy and helpful in times of financial stress. And many chose this option over more complicated solutions, such as enrolling in an income-driven plan, especially when they needed immediate repayment relief. Some said they were not eligible for alternatives to suspending payments, and others noted that they were not offered such options. Others said that servicers applied forbearances to their loans to bring their accounts current or facilitate enrollment in income-driven repayment plans. Even participants who said forbearances and deferments had negative long-term consequences, such as substantial growth in the size of their loan balances, often said they felt they had no choice but to keep using those tools.
• Borrowers reported both positive and negative experiences with servicers . Some said that working with loan servicers got them the information they needed to understand the repayment system and make decisions and resulted in favorable outcomes. However, others—mainly off-track borrowers—indicated that servicer responses were complex or inconsistent and added to their confusion, and that making repayment changes required multiple phone calls.
• Growing balances overwhelmed and discouraged off-track borrowers . Having a growing balance—from interest accrual, capitalization (i.e., the addition of interest to the principal, which increases the amount subject to future interest charges), periods of paused or nonpayment, or income-driven payments that did not cover the accruing interest—created psychological and financial barriers to repayment for many borrowers. The tension between borrowers’ desire for lower payments and their frustration at rising balances was especially prevalent in conversations around income-driven repayment plans. In addition, many participants were aggravated by the repayment process because of confusing rules, unaffordable payments, negative interactions with servicers, and impacts on other areas of their financial lives. Many said their monthly payments were out of reach and there was nothing they could do.
• Participants reported feelings of regret and gratitude about borrowing .Some borrowers said that their experiences made them unlikely to borrow for future education, that they would have made different college choices, or that they had warned family members against taking out student loans. However, others acknowledged positive aspects, including being able to earn a degree that would have been out of reach without loans, to have the career they wanted, and to provide for their children.

With the student loan repayment system under pressure as more borrowers struggle to repay, the focus group insights into the barriers borrowers face should provide federal policymakers with important guidance as they seek to reform the higher education financing system. These findings, in combination with existing quantitative data, suggest four actions that the U.S. Department of Education and Congress could take to facilitate successful repayment:

• Ensure that information provided to borrowers is consistent, accurate, relevant, and timely . Throughout the focus groups, borrowers reported receiving inconsistent information and experiencing confusion, especially around key friction points, such as the transition from school into repayment and enrollment in income-driven repayment plans. The department should facilitate more uniform, effective servicer communications by identifying and requiring that servicers use promising methods for delivering timely information to borrowers, evaluating outcomes, and making changes as needed.
• Establish clear standards for servicing and provide oversight to ensure proper implementation . Standards should include a focus on borrower outcomes—such as reducing rates of delinquency and default—and requirements for outreach to borrowers in periods of transition, such as early in repayment and while using a forbearance or deferment.
• Help off-track borrowers enroll in affordable plans . Timely, user-friendly information could guide borrowers through complex decisions. However, Congress and the Department of Education should also take steps to ensure that borrowers face fewer thorny decisions by effectively removing barriers to enrollment into income-driven plans—such as burdensome documentation processes—and transitioning more borrowers into such plans, especially those who are behind on their payments or in prolonged periods of deferment and forbearance.
• Examine the causes of balance growth within the federal student loan portfolio and potential steps to address them . Income-driven repayment plans and options for pausing payments provide some needed short- and long-term relief for struggling borrowers, but as rates of balance growth and the number of borrowers in default increase, policymakers should assess the costs and benefits to borrowers and taxpayers and seek solutions.

Student loan borrowers in the U.S. face significant challenges, including delinquency, default, and increasing balances, as they navigate the complexities of the repayment system. This report aims to help illuminate the particular points at which borrowers encounter problems and to identify actions that policymakers can take to promote successful repayment among the millions of Americans with student debt.

About the analysis

Between December 2018 and January 2019, Pew conducted 16 focus groups with 152 borrowers across eight cities—Alexandria, Virginia; Detroit; Kansas City, Missouri; Memphis, Tennessee; Miami; Phoenix; Portland, Maine; and Seattle. The researchers sorted participants into four somewhat overlapping categories based on self-reported information about their repayment experiences (see Figure 1 and Appendix B):

• On-track borrowers never or infrequently struggled to make payments, had not defaulted on a student loan in the past two years, and were or were expected to get on track to repay their loans or have them forgiven. Borrowers in this category had a range of balance size.
• General, off-track borrowers struggled to make payments most or every month, had defaulted on a student loan in the past two years, or were not on track and did not expect to get on track to repay their loans or have them forgiven. Borrowers in this category had a range of balance sizes.
• High-balance, off-track borrowers met the criteria for general, off-track but had original balances above $40,000.
• Low-balance, off-track borrowers met the criteria for general, off-track but had original balances below $10,000.

The researchers conducted four focus groups with each category of borrowers. The purpose of the focus groups with on-track and general, off-track borrowers was to better understand why some people successfully navigate the repayment system but others fall off track.

Borrowers who owe the least—often less than $10,000—default at higher rates than those with larger balances, 2  and even people who make payments on time sometimes have negative financial outcomes, such as growing loan balances resulting from payments that do not keep up with the interest that accrues and capitalizes on their loans. 3 (Although many borrowers experience the financial burden of growing balances, those with high balances often feel it acutely, even if they avoid default.) Because of that, Pew conducted focus groups with high- and low-balance, off-track borrowers to better understand the distinct realities each of these groups faces.

“On-track” and “off-track” are names the researchers assigned to the categories based on borrowers’ answers to questions on a screening guide and for ease of communicating the results of the study. However, these names do not encompass all aspects of a borrower’s experiences in repayment. For example, some borrowers in the on-track focus groups indicated that they were or had been delinquent on their loans and experienced difficulties repaying, and several in off-track groups indicated that some aspects of the repayment system were working well for them.

This report highlights borrowers’ own words using a selection of borrower quotes, some of which may indicate a misunderstanding of the repayment process. Further, many focus group participants used the terms “deferment” and “forbearance” interchangeably, so they also are used interchangeably in this report. Additional quotes are available in Appendix A.

Key Elements of Loan Repayment

Most federal student loans are managed by third-party companies, known as servicers. These firms are expected to perform functions, such as collecting payments and helping borrowers select a repayment plan and access tools for pausing payments in accordance with federal rules, regulations, and directions. 4

Repayment plans

Borrowers who graduate, drop below half-time enrollment, or leave school automatically get a six-month grace period before their first payments are due. 5 Unless they select another plan, borrowers start repayment in the Standard Repayment Plan , which has fixed payments over a 10-year period such that borrowers will completely pay off the principal and interest on their loans over that span provided payments are made in full and on time. 6 If eligible, borrowers also have the option to enroll in other plans that lower monthly payments or extend the repayment period, but these plans may increase the interest accrued and therefore the amount repaid over the life of the loan.

Graduated Plan : This program allows borrowers to initially make lower monthly payments than those in the Standard Plan, but the payment amount increases every two years for 10 years such that borrowers will pay off the full principal and interest over that span, provided payments are made in full and on time.

Extended Plan : Borrowers with balances over $30,000 can enroll in Extended or Extended Graduated Plans, modified versions of the Standard and Graduated Plans that generally support repayment over 25 years. 7

Income-driven plans : These plans have monthly payments that are calculated based on a borrower’s income and family size, which must be recertified annually. 8 Congress has authorized the Department of Education to forgive any remaining balance after 20 or 25 years of qualifying payments.

Pausing payments

A set of tools, known as deferment and forbearance, is available to support borrowers who need to postpone or suspend their payments. Eligible borrowers include those who are enrolled at least half-time in school, unemployed, disabled, serving in the military, or experiencing economic hardship, among other reasons. 9

Deferment : Borrowers with certain types of loans may be able to pause their payments and avoid accruing interest during the deferment period. 10 Most borrowers who use deferments do so while enrolled in school or for financial hardship, such as unemployment. 10

Forbearance : In general, loans paused using forbearance accrue interest. Borrowers can opt into discretionary forbearances—typically offered during periods of economic hardship—or be placed in mandatory forbearances by their servicers. Servicers can apply forbearances while they process income-driven repayment and other loan-related applications or while borrowers work to submit required documentation. In addition to pausing future payments, forbearance can be applied retroactively to make delinquent accounts current so the borrowers can, for example, enroll in income-driven plans.

Borrowers who qualify for a deferment or a forbearance can typically postpone their payments for up to a year at a time (although some borrowers use these tools for shorter periods) and for a maximum of three years using each type of tool. 11 With some types of deferment and many types of forbearance, when the period of suspended payments ends, unpaid interest on the loan capitalizes—that is, is added to the principal and increases the amount subject to interest charges. 12 (See “How Does Interest Accrue and Capitalize on Federal Student Loans?” for additional information about interest accrual and capitalization.)

Delinquency and default

When borrowers do not make payments, they become delinquent on their loans, and when they reach 270 days without a payment, they default. 13 Student loan delinquencies are generally reported to national credit bureaus after 90 days of nonpayment. Most loans today remain with the servicer between 271 and 360 days past due. Loans are then transferred back to the Department of Education, which generally assigns them to a private collection agency. Borrowers can make payments during the transfer period to avoid being sent to collections. 14

In addition, and unlike most other types of debt, federal student loans continue to accrue interest during default and are rarely discharged in bankruptcy. 15

Communication

In addition to servicers, a variety of entities can contact borrowers about their federal student loans while they are in repayment. For example, those with loans made before 2010 (when the Department of Education became the lender for all new federal loans) might also hear from third-party entities, such as those acting as guarantors for their loans on behalf of the federal government, monitoring compliance, helping borrowers stay current, reimbursing lenders when payment is not received, and collecting from borrowers in default. Others could be contacted by their schools or by consultants that help institutions manage rates of default. 16 And borrowers who are in default are likely to hear from debt collection agencies.

Navigating this web of actors, on top of an already complex repayment system, may contribute to borrowers’ broader confusion and the rise of third-party debt relief companies, private firms that offer loan management services for a fee. 17

Financial instability was the biggest barrier to repayment among off-track borrowers

Research indicates that the overall state of a family’s finances informs how the household manages its individual bills and transactions, and off-track borrowers generally agreed that their repayment challenges were the result of budgets that were already stretched to the breaking point. 18 In addition to earning less money than they anticipated, many off-track borrowers reported experiencing income volatility and financial shocks—such as unemployment, major home or auto repairs, medical expenses, or deaths in the family—that rippled through their finances and hindered their ability to pay on their loans. In addition, borrowers who lived in high-cost metropolitan areas, such as Miami and Seattle, said the cost of living contributed to the unaffordability of their student loan payments.

If your car breaks down, and it needs repair, are you going to get your car repaired, or are you going to do your student loan? (Detroit general, off-track borrower)

We’ve had lots of medical issues that have come up with me and our little boy. You don’t have a choice when that happens. You have to take care of business. (Kansas City high-balance, off-track borrower)

I had a couple of really bad events. We had Hurricane Irma. We lost the roof on our house. (Miami high-balance, off-track borrower)

I was working as a delivery driver to get $5 an hour plus whatever if you get tipped. ... We live paycheck to paycheck. (Miami high-balance, off-track borrower)

The payments stopped because I didn’t have work. ... And so just trying to take care of myself in survival mode. (Seattle low-balance, off-track borrower)

Off-track borrowers, regardless of their balance size, reported paying other bills first

Across categories, off-track borrowers reported having limited resources and paying for transportation, housing, child care, and groceries before student loans, in part because, unlike rent, car, or utility payments, nothing was at risk of being repossessed or shut off when they missed a student loan payment. 19 Further, several focus group participants noted that most other bills do not offer the option to pause payments that is available for student loans.

That borrowers missed student loan payments instead of other types of bills is consistent with findings from previous research. For instance, a 2017 survey found that, among respondents with student loans who said they would struggle to pay their monthly bills in full if faced with a $400 emergency expense, 46 percent said they would miss or make partial student loan payments in an effort to cover such an expense, compared with 13 percent who said they would skip a rent or mortgage payment and 22 percent who would skip a utility bill. 20 (See Figure 2.)

These trade-offs were especially severe for low-balance, off-track borrowers, and far fewer people in this group reported making payments than other off-track borrowers.

Utility bills—those have to be paid. Otherwise, your electricity is going to be cut off. So it’s either do I pay my electricity bill, or do I pay my bill to a college loan? (Miami low-balance, off-track borrower)

I started repaying, but things will come up and I’ll be like, do I pay for my child’s day care or do I pay for student loans? Oh, I’m going to pay for day care because I have to get to work. So that’s the end of it. That’s how it is. (Kansas City high-balance, off-track borrower)

Am I buy[ing] groceries this month? And am I going to be able to pay my rent? ... It’s not thinking in the long term. It’s dealing with the issue that’s right in front of you. (Portland general, off-track borrower)

We’re robbing Peter to pay to Paul. It’s a juggling act. Like you might delay this, and you might pay your cable a few days late so that you can pay your student loan. ... It’s this constant battle of figuring things out to make sure that everybody is paid. (Portland general, off-track borrower)

If you don’t pay your electric bill, you lose your electricity. ... But student loans, you don’t lose anything. You just try and schedule forbearance or deferment. (Seattle low-balance, off-track borrower)

Failing to repay a student loan can have serious long-term financial consequences. Borrowers can face collection fees; wage garnishment; money being withheld from income tax refunds, Social Security, and other federal payments; damage to their credit scores; and even ineligibility for other aid programs, such as help with homeownership. 21  For some, fear of these consequences—predominantly damage to credit scores and wage garnishment—or previous experiences with delinquency and default drove them to continue repaying their loans even when they were facing other financial challenges.

I don’t want to ruin my credit or [have them] garnish my wages ... so I just pay. (Miami high-balance, off-track borrower)

They tried to garnish. And they’ll suspend my license. They send me a whole list of threats, so I finally said, OK. I got to pay this. (Miami low-balance, off-track borrower)

My credit is very important to me. And bringing the score up is very important to me. ... I have paid my bills late, but it’s still my bill, and I’m going to get to it eventually. (Phoenix low-balance, off-track borrower)

I just can’t afford to have my credit be hit, because everything’s tied into credit, from getting a job to, you know, if I needed to get a car someday, even to being able to rent an apartment, let alone buy a place. ... So, for me, as long as I’m able to, I feel obligated, like forced to pay, even though I might not be putting as much food on my plate in any one given month because of the credit issue. (Seattle high-balance, off-track borrower)

It feels good to pay your bills. ... But ultimately, I don’t want to get garnished. ... My credit is bad anyway, so I just don’t want to get garnished. (Seattle low-balance, off-track borrower)

Some off-track borrowers reported that when they did have a bit of slack in their budgets, they did things to maintain and support their and their families’ economic security and quality of life, such as paying for activities for their children, visiting or sending money to family members, and saving for the future. One Memphis general, off-track borrower indicated that she was “not going to take my [financial] cushion money and pay off my student loans. ... If my refrigerator was to go out, I’ve got to be able to buy food to feed my family.”

Across categories, off-track borrowers reported wanting to make payments

In many cases, off-track borrowers who had missed or paused student loan payments or who reported needing to pay other bills first said they nevertheless wanted to make their student loan payments. 22 Some even took a second or third job to make up the difference.

I don’t think any of us enter into this thinking, oh, I’m going to go to school, and I’m not going to pay this money. I don’t think that was any of our intent. But I definitely thought that I was going to make a substantial amount of money, and this wasn’t going to be an issue. (Detroit general, off-track borrower)

It’s my responsibility to pay it. I racked the bill up getting the degree, so I want to pay it off, but it’s like, can I at this price, you know? (Memphis general, off-track borrower)

I don’t think anybody just doesn’t pay on purpose. ... We’re responsible society members. If we’re not paying something, it’s because there’s something else that’s priority. (Miami high-balance, off-track borrower)

I work a full-time, like 9-to-5, corporate job I went to college for, and I also drive Uber. And my Uber money helps pay the student loans. (Miami high-balance, off-track borrower)

I have a sense of obligation about my school loans. I didn’t take them out just to walk away from them. And they serve a purpose, and I’m driven to repay that. But I also have children and obligations in life. You know, so there’s a line there. (Portland general, off-track borrower)

Unlike many off-track borrowers, those who were on track were able to maintain steady incomes and receive help from family and social networks

On-track borrowers also said that their balance sheets strongly influenced their repayment decisions, although their comments generally indicated that they were delaying major purchases instead of making trade-offs among household expenses. Some said the payments were not a burden, while others noted that paying their loans sometimes meant cutting back on discretionary expenses. Several mentioned that they saved less for retirement or put off major expenses, such as purchasing a home or pursuing additional education, in order to pay their student loans.

Many on-track borrowers reported previous repayment struggles and still felt some anxiety about repayment and their financial situations. However, this group generally had less financial stress and fewer shocks than off-track borrowers, and many cited having a stable job and income as well as receiving financial help from family and social networks as reasons they no longer had difficulty repaying their student loans.

My savings is virtually nil because I’ve been dumping all my money in the student loans. I just want to get them done. (Alexandria on-track borrower)

The route that I chose is a very aggressive route. It means no new cars, no new clothes, living low, really low. I have a wife, and we constantly have to talk to each other, like we’re doing this today, this sacrifice today for tomorrow. Down the road, we’re going to have no debt, be able to have the house we want, etc., pay for the kids. So it’s just sacrifices. But you have to constantly have that conversation to boost yourself up. (Detroit on-track borrower)

I struggled earlier, but I have a network, a wife, parents, people who could lend me money to get me by for a short period. (Detroit on-track borrower)

Nobody could afford to pay for me to ... go to school. But there was this understanding that it won’t purely be your burden even though these are your loans. So if I can’t make payments, my family will help me a little bit. (Memphis on-track borrower)

I have a great job right now. It’s paying me a great amount of money, and I’m good. (Memphis on-track borrower)

Off-track borrowers typically had difficulty early in repayment

When borrowers graduate, leave school, or drop below half-time enrollment, they are supposed to complete an online exit counseling course, which provides information about repayment. Nevertheless, many off-track borrowers across categories indicated that upon entering repayment, they experienced confusion or lacked needed information.

For example, many of these borrowers did not remember selecting—or were not aware that they could select—a repayment plan, and several said they were aware of only two options—pay or don’t pay. For many, the monthly dollar amount they were being asked to pay—and how it would affect their ability to afford other expenses, such as child care and transportation—was the key factor in their choice of plan, rather than the specific features of each plan or the longer-term costs and benefits. For example, plans that decrease monthly payments also increase the time spent in repayment, cost the borrower more over the long term, and can cause the principal balance to grow if the payments are too low to cover the monthly interest. But income-driven plans can also result in the forgiveness of remaining balances after 20 or 25 years of qualifying payments.

When asked which repayment plan she was in, one Detroit general, off-track borrower said that she chose “the cheapest option.” And an Alexandria general, off-track borrower said, “It almost doesn’t matter because ... I’m trying to lower the amount of my monthly payment to be able to pay for other things.” In the case in which none of the offered payments was affordable, borrowers often reported opting to pause or miss payments.

Although many did not recall participating in exit counseling, even those who did reported not feeling prepared to manage repayment and instead learning through trial and error. 23 As a result, some off-track borrowers said that they first interacted with their servicers when the servicer reached out after they missed payments to discuss if they could make their monthly payments and offer assistance and options. 

If you missed a payment by like a week ... they call you all the time. ... They’ll just send you an email, and it’s like, hey, noticed you missed your payment. (Alexandria general, off-track borrower)

They’re calling because they’re trying to find out why you’re not paying. And then they’ll offer some suggestions of what you need to do. ... It’s the juggling [of your bills]. ... You almost become reactionary. They call you. (Detroit general, off-track borrower)

They call or email before you think about calling them. (Memphis general, off-track borrower)

They call ... and [ask whether] you can ... afford this payment right now or [tell you] you’ve missed this payment. (Seattle high-balance, off-track borrower)

They call you, but the very first thing they offer when you speak to someone, and in the recording, is that there are options to help you. (Seattle low-balance, off-track borrower)

All categories of borrowers shared a consensus that their initial monthly bills were higher than they had anticipated. Research indicates that many students underestimate the amount they borrow while in school. 24 And some, when taking out their loans, may not have been aware of or accounted for the interest that would accrue and capitalize on their loans before they entered repayment. (See “How Does Interest Accrue and Capitalize on Federal Student Loans?” for more information.) For some off-track borrowers, the surprising amount of their first monthly bill combined with other financial difficulties may have contributed to early missed payments.

Borrowers consistently faced challenges understanding, enrolling in, and remaining in income-driven plans

Borrowers have access to a range of repayment options, including income-driven plans, which calculate payments based on a borrower’s income and family size and must be recertified annually. (See Figure 3.) Research and government analysis show that income-driven plans can help struggling borrowers avoid delinquency and default. For example, studies in Iowa found that 35 percent of community college students enrolled in the Standard Repayment Plan defaulted compared with just 3 percent of those in income-driven plans. 25 However, only about 30 percent of borrowers are currently enrolled in such plans nationwide. 26

Focus group participants reported that income-driven plans were difficult to get into initially and to stay enrolled in because of the complex application and recertification processes. According to federal data, between 2013 and 2014, more than half of borrowers in income-driven plans did not recertify by the deadline, and nearly a third went into hardship-related forbearance or deferment. 27 Such delays—which could occur because paperwork is not submitted or processed accurately or on time—cause monthly payments to increase and unpaid interest to capitalize. 28

FUTURE Act Could Improve Access to Affordable Repayment Plans

In December 2019, the federal Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act became law. 29 Among its provisions, this legislation includes measures to improve the system for repaying federal student loans for more than 8 million borrowers now enrolled in income-driven repayment plans and those who will enroll in the future by directing the IRS and the Department of Education to securely share relevant borrower data. This data-sharing has the potential to streamline the burdensome and duplicative income verification requirements for these plans, bolster the accuracy of income information used to determine borrowers’ repayment obligations, and reduce improper payments.

If the departments of Education and Treasury effectively implement the act, it will help ensure that millions of borrowers are able to more easily enroll and remain enrolled in income-driven repayment plans. However, implementation will probably be a lengthy process, could create additional barriers for borrowers, and raises key questions, such as: How can the actions of each agency best reduce the barriers that prevent borrowers from accessing affordable repayment plans? When and how can borrowers agree to having their data shared? 30 (See “Help off-track borrowers enroll in affordable plans” for more information.)

Borrowers found enrolling and staying in income-driven plans challenging

Some focus group participants reported doing their own research and reaching out to servicers to request income-driven plans. However, many others indicated that they learned about these options only after they were already in distress, and a significant share believed they would have benefited from being enrolled and having lower payments months or years earlier.

Both off- and on-track borrowers identified the annual income and family size recertification process as the biggest challenge to enrolling and remaining in income-driven plans. Many borrowers were unable to complete the process on time, causing their payments to increase, and some cycled in and out of these plans, sometimes being placed in forbearance until they could re-enroll, which extended their time in debt.

Every year, you have to redo your paperwork for every single loan that you have. And every single year they’ve screwed it up, and so, every single year ... I budget a month and a half where it’s going to be screwed up. They’re going to charge me over $3,000 instead of $300. I call, and they go, well, it’s going to take us time, and then they put me in forbearance whether or not I want it. (Alexandria general, off-track borrower)

I got involved in a big trial, and I think I have an income-based repayment [plan], and I missed the notices. They just slipped past. And so in order to get the paperwork in and everything like that, I had to use like two months’ forbearance so I wouldn’t get a crippling payment. (Alexandria general, off-track borrower)

From year to year, you’ve got to recertify. You got to submit income information, and the servicer ... will figure out what your new payment is going to be based on the information that you’ve submitted. And your payment may go up. And that would depend on your income. And that’s the main hassle—recertifying. (Detroit general, on-track borrower)

I’ll talk to them on the phone, and then they’ll be like, OK, now go to www.mystudentloans.org, and go here, and go here, and then you’re going to click here. I hope I find what I’m looking for. ... I’ve even signed up for the wrong thing, because it was just a hassle, go here, go here, go here, and I signed up for something, and they were like, no, you did it wrong. (Memphis general, off-track borrower)

It’s not as user-friendly to find out what you’re supposed to do afterward. They’re like, oh, just go on here and fill this out and do this, and we’ll mail you this, and then you do this. It’s like so many steps, and it’s so much over-whelming information that it’s like, it was easier to get the loan than it is to repay the loan. (Phoenix high-bal-ance, off-track borrower.)

Many off-track borrowers found their income-driven payments unaffordable

Despite the calculations used for income-driven plans, many off-track borrowers, regardless of balance size, said their payments were still unaffordable, or would be if they enrolled. Participants indicated that this was primarily because their income was volatile or because the plans did not adequately take the other aspects of their balance sheets, such as expenses, into account. As a result, some borrowers who reported being enrolled in income-driven plans also used deferments and forbearances or missed payments.

Even if they did make it easy, I still probably couldn’t afford the payments. (Alexandria general, off-track borrower)

They don’t consider all the other stuff, my mortgage payment, my car, you know what I mean. I can never get it lower than as low as what I could afford. (Kansas City high-balance, off-track borrower)

If there was a way to show each and every single bill on top of your W-2 or your biweekly or monthly paycheck, they could clearly see that you simply cannot do it. (Miami high-balance, off-track borrower)

They act like that’s the only bill you have to live. They don’t ... factor in any mortgage, any anything. (Miami high-balance, off-track borrower)

Right now, I’m not making payments because there’s probably no way I could make payments. Even with the programs available, I don’t qualify for reduced payments, because I technically make too much despite having two kids and a bunch of other stuff that they don’t consider. (Seattle high-balance, off-track borrower)

They want a huge payment. And in order for me to reduce the payment, because I actually don’t earn the money that I should with my degree ... they say, OK, send me all this paperwork, send me pay stubs, send me this, write this, do this. It’s only for 12 months, and then you have to redo it. I struggle with that part of it. ... It’s a huge process. Because you’re in the midst of living, so that’s why it’s just easier to pay a straight bill and have it be straightforward than to go through all this paperwork. (Seattle high-balance, off-track borrower)

However, as mentioned previously, most borrowers making decisions about income-driven repayment plans did not factor in the potential for loan forgiveness. In general, they focused on more near-term concerns, and a growing balance made them extremely uncomfortable; many said they did not trust that their balances would be forgiven in the longer term. 31

On-track borrowers were generally able to enroll and remain in a plan with affordable payments

Although borrowers across categories faced difficulty with income-driven plan recertification, on-track borrowers generally reported being able to manage the process or re-enroll within a short period of missing the deadline, which probably contributed to their general satisfaction with their current plans. On-track borrowers who remained in the Standard Repayment Plan were able to make their payments without problems or said they preferred to pay down their balances more quickly than was possible on an income-driven plan. One Alexandria on-track borrower said, “I’ve considered income-based repayment but chose not to because I didn’t want to extend the life of the loan longer than I needed to ... and I wasn’t missing payments, and so I thought, well, [I’ll] just keep the Standard [Repayment Plan].”

How Does Interest Accrue and Capitalize on Federal Student Loans?

The Department of Education originates new loans through the William D. Ford Federal Direct Loan Program, commonly known as “direct loans.” Borrowers and their families can take out three main types of direct loans: 32

• Subsidized loans are available for undergraduate students with demonstrated financial need.
• Unsubsidized loans are available for undergraduate, graduate, and professional students, independent of need.
• PLUS loans are available to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid.

Borrowers must repay their student loans with interest

In general, interest accrues daily on federal student loans, including while a borrower is in default, and interest rates are set each year and fixed for the life of the loan. For the 2019-20 school year, subsidized and unsubsidized loans for undergraduates had an interest rate of 4.53 percent; the rate for unsubsidized loans for graduate or professional students was 6.08 percent, and PLUS loans had an interest rate of 7.08 percent. 33

In general, subsidized loans do not accrue interest while the borrower is enrolled in school at least half time, during the grace period, and during periods of deferment, but unsubsidized and PLUS loans do. Under some income-driven plans, the government may also pay all or a portion of the accrued interest due each month for a specified period, depending on the plan and the loan. 34

Federal rules and guidance require that borrowers’ monthly payments first be applied to unpaid interest and then to outstanding principal until the loan is paid off. However, during periods of paused, non-, or income-driven payments, interest can accrue, and balances can grow.

Accrued interest can capitalize

Interest capitalization can occur at certain times during the repayment process, including:

After the grace period : When borrowers enter repayment after their six-month grace period, all unpaid interest is added to their outstanding balances, increasing the principal balance on which interest is calculated before borrowers make their first payments.

After deferments and forbearances : All unpaid interest at the end of one or a series of consecutive deferments or forbearances is added to the principal. This includes unpaid interest that accrued both during the period of suspended payment and before payments were paused.

Income-driven repayment : All unpaid interest capitalizes when borrowers change, exit, or become ineligible for reduced payments under an income-driven repayment plan.

Consolidation and default : Additionally, unpaid interest also capitalizes when borrowers consolidate or default on their loans. For certain borrowers, unpaid interest also capitalizes when exiting default.

Capitalization contributes to principal balances and rising payments and may also play a role in many borrowers’ lack of progress paying down their balances. Among the cohort of borrowers who began college in 2003, 38 percent had not managed to lower their principal as of mid-2015. 35 Further, 33 percent of borrowers who entered repayment in 2002 owed more after two years, and that share rose to 57 percent among those who entered repayment a decade later. 36 The Department of Education reports that $18.5 billion in unpaid interest was capitalized in fiscal year 2018 alone. 37

Borrowers of all types paused payments, and many did so for far longer than they had initially planned

Almost every off-track borrower and many on-track borrowers reported using deferments and forbearances to suspend their payments at least once, and many did so multiple times. 38 (See Figure 4.) Most who reported pausing payments said they did so for far longer than they had initially planned, and many reported learning about deferments and forbearances from servicers after missing a payment or reaching out for help when they were unable to make payments.

Some borrowers reported using deferments or forbearances when their first payments were due because they did not have adequate resources to pay. Others did so when they had a financial shock, had a child, or needed extra money, such as for school supplies or Christmas presents for their children. 39

I deferred or had forbearance when I went through a separation and divorce process. I was a single mom, and I decided to go back to school to get my teaching certificate so I could have the same schedule as [my daughter]. So it was probably a year to two years at that time, which was really great. To be able to do that was a gift really. (Alexandria general, on-track borrower)

Mine was getting my footing after graduating. ... And I didn’t have the money to pay at the time, so I went into forbearance pretty early. (Alexandria general, off-track borrower)I had one in between jobs. I lost my job, and so I had to get a deferment. (Detroit general, off-track borrower)

You think you’re going to come off [the forbearance] and make payments. The problem is once you stop making those payments, you’re still living paycheck to paycheck. So, maybe something else happens in those six months. And when you come out of it, you’re still not in any better position to start making payments again. (Miami high-balance, off-track borrower)

The recent one was because of Christmas. I needed some extra cash for the holidays. They give you up to three months max, so I did it for three months. (Kansas City high-balance, off-track borrower)

Other borrowers decided to use deferments or forbearances when their monthly payments rose—perhaps after failing to recertify for an income-driven plan or as part of a graduated plan—and they could no longer afford them. And some reported that servicers applied forbearances retroactively to bring accounts current, while they processed income-driven plans or other loan-related applications, or while borrowers worked to submit required documentation. 40 One Portland general, off-track borrower said, “When you call, they’ll erase like if you’re a month late. They erase it and say ... we’ll make this [forbearance] retroactive. So, OK, so it’s not as pressing as it could be.” Another said, “You can use a month of forbearance to bring your account current and then get back on paying.”

Some borrowers indicated that they were not eligible for or offered options for lowering payments other than deferments or forbearances, while others said they were given other options but requested a deferment or forbearance. One Kansas City high-balance, off-track borrower said, “I’m just [going to] defer, I don’t even want to hear the options. No options are going to help me alleviate the balance.”

Pausing payments was easy

Almost everyone who had paused a payment said it was easy to do. Borrowers reported that pausing payments with their servicer was quick and could be completed in one interaction online, over the phone, or by electronic communication.

They’d send me an email, and it was so easy to say, yes, I’ll defer it, or I’ll go into forbearance again for a cou-ple months to give me time to try to get my finances back in order. (Alexandria general, off-track borrower)

I just said, I can’t make my payments, and she said, you’re eligible for a forbearance for X amount of time, and I jumped on it. I said, OK, let’s do it. ... It was automatic. (Alexandria general, off-track borrower)

[They ask] what’s going on? And then you tell them, and then they tell you what options they have available, and then you answer. All you have to do is say yes to this, or we’ll send you an email and you just have to sign it and send it back. It’s usually pretty easy. (Memphis general, off-track borrower)

I took advantage of the deferment thing. ... It was so easy. I just called again, and I figured let me just ask if I can defer, and they said, sure. (Miami low-balance, off-track borrower)

My job, from the place I went to go to lunch is like maybe six minutes away, literally, and I called from the time I left my job to Smashburger. And by the time I got to the parking lot of the Smashburger, I was already on deferment, like it was super-duper easy. (Phoenix high-balance, off-track borrower)

Further, many participants said they chose the expedient option—deferment or forbearance—over more complicated solutions, such as enrolling in an income-driven plan, especially when financial circumstances forced them to think in the short term and they needed immediate relief.

Although many borrowers acknowledged that interest continued to accrue when their payments were paused, some did not fully appreciate the impact that would have on future monthly bills or understand that interest could capitalize when they began making payments again. One Alexandria general, off-track borrower noted that, after his forbearance ended, “they capitalized my payment ... without telling me. ... So I’m paying interest on all of it.” And a Detroit general, off-track borrower said, “You’re suspending because you’re at a financial crossroads, and life happens, and things are happening. So when you suspend it, that was supposed to help me. But you pretty much kicked me up really high, and now I’m really, you know, just trying to keep my head above water after that forbearance.”

But even when focus group participants acknowledged that their use of short-term options had long-term consequences, they often continued to use them because they felt they had no choice, especially if they were not able to afford their monthly payments. 41 As another Detroit general, off-track borrower said, “They said, well, we gave you this forbearance, your interest is going to go up. ... I was laid off in my case, so I had to say, yes, I’ll take it. ... So the interest didn’t stop. I just stopped having to make the payment. And so that blew up, and, of course, I was laid off longer than six months. And so I had to go back and get another forbearance.”

Further, some borrowers faced with financial insecurity tried to make partial payments rather than using forbearances or deferments but encountered barriers to doing so. Making partial payments can put borrowers into delinquency status, and servicers must report borrowers who fall behind by 90 days’ worth of payments as delinquent to the credit bureaus. Many off-track borrowers who could not afford their payments said the repayment system was not flexible or responsive enough to accommodate their financial situations.

Borrowers reported both positive and negative experiences with servicers

Several borrowers in each category also indicated that they first learned about their options from their servicers—typically when the servicer called after they had missed a payment—that the servicer gave them the information they needed, and that working with the servicer resulted in favorable outcomes.

They’re very accommodating, at least in terms of the person you talk to, and they’re very helpful. ... They won’t just refer you to the website or whatever. They’ll even ask you, do you want me to send you the document? (Alexandria general, off-track borrower)

[My servicers] were very pleasant, very helpful, gave me a wealth of information, didn’t make me feel like they were getting ready to come after me, but gave me some solutions as to what I needed to do, gave me the websites, gave me the names, you know. (Detroit general, off-track borrower)

My company has always been really good. I haven’t had any complaints with them other than they call me every day. ... I found out about the plan I’m on now, because I didn’t know about that particular income-driven plan. The guy on the phone was really informative, and he said, hey, we’ve got this plan here. Have you looked at it? And then [he gave me a] 20-minute explanation of how it works. (Memphis general, off-track borrower)

The whole advice-giving process felt like it was somebody who was like really in it for me and like explaining all the parts. (Portland on-track borrower)I’ve found that the loan servicers have worked with me all along the way very well. ... If I ran into an issue, they were really good at working with getting the repayment plan that would fit. (Portland general, off-track borrower)

However, others—mainly off-track borrowers—said servicers added to their confusion, and they expressed frustration that servicers were not able to lower their payments or that they had to do “detective work” to chase down information. And many of these borrowers indicated that they received inconsistent information each time they spoke with their servicers and that the customer service representatives varied in how helpful or knowledgeable they were. 42 As a result, these borrowers reported that it took multiple calls to get something done, that they did not trust the information, and that they had to ask many questions or do their own research to find solutions. These issues also made many borrowers feel that servicers did not care about their long-term success or act in their best interest.

My experience calling in, like it’s going to take five phone calls to get any answers, and no one knows the answers, anyone who works there it seems. (Alexandria general, off-track borrower)

When you talk to somebody on the phone, it very much depends on who you’re talking to. Maybe it’s me and the day I’m having, and I didn’t have enough coffee, because some days, I swear I don’t understand. It’s like they’re not making sense, or they just don’t care what my problem is or what I’m looking for. (Detroit general, off-track borrower)

I don’t know that I trust them to give me information ... because they’re going to tell you what’s going to be best for them. Not what’s best for me. (Miami high-balance, off-track borrower)You have to fight to pay your bill. You have to do all this detective work, and they make it so tough to pay it. That’s why I paused it, honestly, because of what I was dealing with. (Phoenix low-balance, off-track borrower)

They’re not going to offer you anything. You have to know what you want when you call. (Seattle low-balance, off-track borrower)

Although on-track borrowers reported fewer interactions with servicers than those who were off track, on-track borrowers tended to mention contacting servicers for assistance with billing or payment allocation. For example, several participants reported contacting a servicer to request that extra payments be applied to principal. And a Detroit on-track borrower reported being charged double payments: “I finally got that straightened out, an hour on the phone, right? The next month, I started looking online, and they’ve scheduled me for both payments again.”

Several participants reported not hearing from their servicers

Some borrowers said they did not remember hearing from their servicers, but federal rules require servicers to contact borrowers at certain times in the repayment process. 43 These borrowers may not recall their servicers’ attempting to reach them for various reasons, including that they did not receive the communications (for example, because of changes in address), that outreach was attempted but contact was not made, that servicers were noncompliant, or that the information reached but was not acted upon by borrowers. 44

Anywhere else, you would get a phone call. Your credit card company will call you, definitely. If you miss like one day, they’re calling you. (Kansas City high-balance, off-track borrower)

Until I got the letter from collections ... that was the first I heard about it. ... I will say, collections works with you. ... But it’s sad that you have to wait for it to get to collections in order for them to work with you on it. (Kansas City high-balance, off-track borrower)

I feel like I never heard from the federal government. ... Even now, like I have not heard from them. I only know I owe because of the taxes being taken by it. I moved over the years. I don’t know if they sent things to other addresses, or things have got lost, but I never heard from them about it. (Phoenix high-balance, off-track borrower)

I would like help. I would like people from the company I owe money to to call me every now and then [and say], hey, can we set something up? (Phoenix high-balance, off-track borrower)

It was probably like two or three years after I stopped going to school that I finally started getting either an email or something in the mail saying, hey, you got to start paying your student loans. But I should have been starting to pay my student loans two and a half years prior. There was no information given about how to go about paying back your student loans, from anyone. (Phoenix high-balance, off-track borrower)

Among those who initially reported not being contacted by their servicers, several later said they had received letters, emails, or calls, and others reported moving and losing contact with the servicer.

Growing balances overwhelmed and discouraged off-track borrowers

Among off-track borrowers, growing balances often presented a psychological barrier to successful repayment. 45 Borrowers reported being overwhelmed and frustrated, and lost their motivation to make payments toward a balance that continued to grow. Many were resigned to being in debt indefinitely.

It feels like it’s never going to be paid off. ... It’s just a lot of interest. And I’m not really paying hardly any of the principal off, because I can’t afford to. ... Which is also why you don’t care about paying it off. It’s never going to be paid off. (Kansas City low-balance, off-track borrower)

And even in forbearance, you still get tacked on all this interest. ... And the interest accumulates more and more and more, and then you have to look at your bill and ... your principal just even gets bigger. (Miami high-balance, off-track borrower)

If I saw that my payments made the principal go down, I’d get excited ... [and] keep on paying. But it just keeps adding on to the point that you just lose the desire. You just want to focus on things you really need right now. (Miami low-balance, off-track borrower)

I have a resentment toward [it] because it went up so high. Fifteen years ago, I remember borrowing $3,000. And it got so high. ... So I don’t want to pay them. (Miami low-balance, off-track borrower)

It feels insurmountable. ... But just like even the car payment, like when you make the payments ... and you see the balance went down, that does something. That makes me want to continue doing it. Student loans, you be like, I’m just throwing money down the drain. (Seattle high-balance, off-track borrower)

Borrowers often felt that the rate of balance growth was unfair: One Miami low-balance, off-track borrower said, “I’d be willing to do a payment plan for the principal, what I really borrowed and a little bit more, but the interest makes me say, you know what, I will never be able to pay this off at the rate that they’re willing to give me.”

The tension between borrowers’ desire to have lower monthly payments and their frustration at rising balances permeated the conversations around income-driven repayment. 46 One Detroit general, off-track borrower mentioned that she “did pay $300 last month. ... Your goal [is] to pay it off. It just doesn’t look like that on paper.” And a Seattle high-balance, off-track borrower said, “I’ve been paying the same amount month after month, and, you know, it’s hardly making any dent.”

Several off-track borrowers reported that they chose not to enroll in income-driven plans to avoid paying more over longer periods of time. As one Kansas City low-balance, off-track borrower said, “They called me and asked me if I wanted to make lower monthly payments, but I would have to pay longer, and I said no.”

Multiple negative experiences led to distrust and disengagement

Repeated incidents of confusion about repayment, unaffordable payments, negative interactions with servicers, financial consequences, and growing balances created a generalized frustration with and distrust of the repayment process among focus group participants. Even those who were initially motivated to repay and had made payments or interacted with their servicers said that failures of the system chipped away at their resolve.

In the most severe cases, off-track borrowers indicated that they had exhausted all their options and simply gave up on repayment, ignoring communications from their servicers and resigning themselves to the idea that their loans would never be repaid. 47 Many felt that their monthly payments were out of reach and there was nothing they could do. Low-balance, off-track borrowers in this situation often reported not getting a return on their investments in higher education and not completing a degree of any kind.

It’s hard to see success in this format. I mean, even if I was paying the minimum payment, it’s not eating away at the balance. So when you see that balance continuing to grow ... well, the hell with it, I might as well just get what I can out of life, and it will be what it will be. You know, I got it now, and I’ll have it when I’m dead, so be it. (Kansas City high-balance, off-track borrower)

That’s how it’s been for me. Make a payment or don’t make a payment and ignore all the mail because it feels like my school is getting sold and bought again by another like a collection company. And they keep adding their fees. So the ... amount that I started with now is like quadrupled. ... The interest is so high that I’m just like, what’s the point? (Miami high-balance, off-track borrower)

It was like when the economy got really bad, like in 2009 or 2010, and I could not find a job. And then I pretty much had stopped answering my phone, because I had a lot of people calling me. It wasn’t just them. (Memphis general, off-track borrower)

[I want] to tell them to stop [calling] because the hardship isn’t going to change. They keep asking the same question repeatedly in different words. And you’re going to keep getting the same answer. (Miami high-balance, off-track borrower)

Unless you can pay, there’s no reason to answer. ... I never answer unless I have money to pay them. (Seattle low-balance, off-track borrower)

In addition, some low-balance, off-track borrowers indicated that servicers were aggressive and that they received a very high volume of mail and phone calls, including instances of servicers calling them at early hours or multiple times a day, and even calling their relatives. Many borrowers in this category also reported experiencing late-stage delinquency and default, and some focus group participants may have also had private loans, both of which could mean that certain unwelcome communications may have also come from collection agencies, entities servicing private loans, or the borrowers’ schools as part of efforts to manage cohort default rates, i.e., the percentage of borrowers who default within three years of beginning repayment. (The Department of Education calculates cohort default rates annually for nearly all institutions participating in the federal student loan program, and if a school’s rate exceeds the department’s guidelines, the school risks losing access to federal grants and loans.) But regardless of who was calling, many of these overwhelmed borrowers said they ignored the communications, especially when they felt they could not make their payments or do anything to help their situations.

Participants reported feelings of regret and gratitude about borrowing

Focus group participants across categories said that the challenges they encountered in repayment led to mixed feelings about borrowing for higher education. Some reported that their experiences with student loans made them unlikely to take out more, and some said they wanted to return to school to complete a program or get an advanced degree but chose not to because they did not want to borrow more or have interest accumulate on their existing loans. 48 Others indicated that if they could do it over, they would not go to college if it meant taking out loans, would go later in life when they perceived they could have borrowed less, would have gone to a different school or program, or would not have gotten a graduate degree.

In addition, participants reported warning their children or other family members against taking out student loans in light of their own experiences. Even those who reported paying down their balances sometimes believed that the burden of repayment was too great.

I’m not going back to school because I know if I ever went back for a master’s or grad school, I would have had to defer [my existing] loan. (Alexandria on-track borrower)

If I could do it all over again, I probably wouldn’t go to, I probably would go to college later on in life. All of my friends that did not go to college are doing much better than I am financially. (Detroit general, off-track borrower)

I think if I were to go ... back in time, I would never take loans out. ... I preach it to my nephews and my nieces and anybody I know. Do not take a student loan out unless you really, really have to because I regret no one ever telling me how much it was going to be after graduation and how much the interest rate was going to increase. ... I feel like I’m going to die and still have a student loan. I’m never going to pay it off. (Kansas City high-balance, off-track borrower)

I know two of my nephews were debating it. And I actually showed them how to make money without going to school. And they’re way more successful making way more money than probably most people that graduate with a college degree with no student debt. ... So I always encourage people, unless you know specifically what you want to do, it’s so easy to make a lot of money [without going to school] if you have the drive. (Portland on-track borrower)

I used to be a college adviser, so anybody that comes to me now and they’re students and they’re like what do you think about loans? And I’m like no ... work and pay your tuition. If no one else is going to do it for you, try to do it yourself. You don’t want to have loans. (Seattle high-balance, off-track borrower)

However, in all but the low-balance, off-track category, borrowers also reported positive aspects of borrowing, including the ability to earn a degree and have the career path they wanted. 49 A Detroit general, off-track borrower said, “I got to be a lawyer because I was able to take out that money. I don’t regret my education for one second.” Several people noted that, although it took awhile for their incomes to grow so they could make real progress paying down their loans, they believed that the cost was ultimately worth it. A Portland on-track borrower said, “I feel like I got a pretty good deal in terms of the education I got, what it set me up for, all of that stuff. Like I feel like it was really worth it. So there’s a part of me that’s like, OK, this money ... is what I pay for just getting to get a good education. And so it feels fair to me.”

Some reported that loans were the only way to get a college education or provide one for their children. One Portland general, off-track borrower said, “I applied [for the loans] for my son to be able to go to a good school [so] he would have a career. ... I felt damn proud when I got approved for it, I got to tell you. And so did my husband. Like we were actually going to be able to do good for our kids and give them something we didn’t have.”

More can be done to help borrowers successfully repay

Throughout the focus groups, off-track borrowers defined success as a combination of paying down principal and having the ability to make payments that did not significantly harm other aspects of their financial lives.

Success for me means actually moving forward in my debt. Because I’ve just been pretty much treading water the past couple years. I haven’t made any progress. My personal goal would be to be chipping away at it as opposed to not. (Detroit general, off-track borrower)

Maybe [success means] you’re able to pay your monthly payments, and it doesn’t put a factor on your other bills. (Detroit general, off-track borrower)

Success is getting my bill to a stable point to where I can pay it without any issues. I can pay it whether a mishap happens or not. I can pay it if a tree falls on the roof. (Memphis general, off-track borrower)

I’d say [success is] like getting in front of the interest. ... I would feel like it would at least be not digging yourself further into the hole by at least keeping up with the interest. (Phoenix high-balance, off-track borrower)

For me success is checking in with [my servicer] to keep my payment at what I can afford, which right now is $0, so that I don’t go into default. (Portland general, off-track borrower)

However, many borrowers reported not feeling successful on either front and said the repayment system did a poor job of delivering prompt and sustained relief when they were financially stressed.

These focus group findings are consistent with those in a growing body of research pointing to the challenges student loan borrowers face navigating repayment and show that borrowers who have difficulty repaying are more likely to question the value of loans in helping to facilitate higher education. 50 For example, the opinions and experience presented in this report are similar to those expressed during other focus groups conducted with student loan borrowers. 51 Similarly, the Department of Education has indicated that some borrowers report not having the information they needed to select the right repayment option, not knowing how to avoid and get out of delinquency and default, receiving hard-to-understand communications, and receiving inaccurate or inconsistent information from a servicer. 52 And analyses of student loan borrower complaints by the department and the Consumer Financial Protection Bureau found problems related to communication and customer service, including receiving conflicting or incorrect information. 53

The experiences shared by focus group participants also reinforce the findings from Pew’s quantitative research that the significant challenges faced by current borrowers should drive efforts to reform the student loan repayment system and that the Department of Education and Congress can help improve outcomes by making structural changes that facilitate borrowers’ long-term success. 54

This analysis suggests four actions that the Department of Education and Congress should take to ensure borrowers are able to successfully navigate the repayment system: Ensure that information provided to borrowers is consistent, accurate, relevant, and timely; establish clear standards for loan servicing; help off-track borrowers enroll in affordable plans; and examine the causes of balance growth and potential steps to address them.

Ensure that information provided to borrowers is consistent, accurate, relevant, and timely

Although some borrowers were able to navigate the system and get what they needed from their servicers and the repayment experience, many reported confusion driven by inconsistent information, especially around key friction points, such as the transition from school into repayment and enrollment in income-driven repayment plans. In many ways, these issues are a result of the design of the repayment system—including when and how information is delivered to borrowers and gaps between repayment benefits and protections available to borrowers and the difficulty borrowers have in accessing those features. For example, the Higher Education Act provides important benefits and protections for borrowers in distress, such as income-driven repayment plans, that can help ensure their long-term repayment success. However, as described in this report, people’s repayment experiences can vary widely, even if servicers have focused on identifying effective outreach strategies.

In addition, although exit counseling provides essential information about loans and repayment with the goal of preparing borrowers for success, research on the effectiveness of such programs suggests that delivering general information is often not enough and that offering too much complex material all at once can be overwhelming. Exit counseling is provided during a period of disruption in students’ lives; students who leave school without completing a degree—a group that is more likely to struggle in repayment—might not take this counseling at all, and many borrowers do not experience financial distress until years after they leave school, making it unlikely that the information provided, no matter how helpful, will be remembered when needed.

On the other hand, studies have shown that targeting pertinent information to specific populations when they need it can be effective: People tend to retain information that they find applicable to their current circumstances, and advice is less likely to “stick” when it is not immediately relevant. 55 For example, recent research suggests that the way in which servicers explain income-driven repayment plans when borrowers are considering enrollment could influence how many borrowers choose to enroll, that personalized emails may be an effective mechanism for enhancing borrower outreach, and that showing borrowers how their payments will increase if they fail to recertify for income-driven plans might improve outcomes. 56

The Department of Education and its servicing contractors should ensure that borrowers have, understand, and can identify opportunities to enroll in affordable repayment options.

Facilitate effective communication

The Department of Education should facilitate more uniform, effective servicer communications by identifying promising methods for servicers to use in delivering timely information to borrowers and evaluating the outcomes. As it develops strategies for ensuring consistency and accuracy among servicers, the department should include requirements for the use of these best practices. In particular, guidance on best practices should be integrated into the Next Generation Financial Services Environment (Next Gen), a department initiative to modernize and streamline the technology and operational components of the repayment system. For example, as part of Next Gen, servicers and other contractors will have the opportunity to provide feedback and insights to the department about working with borrowers to help inform development of data-driven outreach campaigns. 57 Further, the department’s Aid Summary or Loan Simulator tools, centralized hubs for customer account information, may provide additional opportunities for the department to share targeted, timely information about repayment with borrowers. 58

Establish clear standards for servicing and provide oversight to ensure proper implementation

Standards should include a focus on borrower outcomes—such as reducing rates of delinquency and default—and require targeted outreach to borrowers in periods of transition, such as early in repayment and while using a forbearance or deferment. Recent Pew research indicates that missing a payment within a few months of entering repayment was common among borrowers who eventually defaulted, and many borrowers with growing balances paused payments multiple times, for long periods of time. 59

Help off-track borrowers enroll in affordable plans

Timely, user-friendly information can help guide borrowers through complex decisions. However, Congress and the Department of Education could help to ensure that borrowers face fewer thorny processes by removing barriers to enrollment into income-driven plans. 60

Facilitate enrollment

Many focus group participants across categories reported that income-driven plans are difficult to both get into initially and stay enrolled in because the application and recertification processes are overly complicated, requiring extensive and repeated documentation. As described earlier in this report, the FUTURE Act has the potential to help streamline the burdensome and duplicative documentation requirements for income-driven repayment plans and is an important step forward.

The act requires that the secretaries of Education and Treasury submit regular reports to Congress on implementation status, but it includes no effective date and leaves much of the process at the discretion of these agencies. To successfully deliver on the legislation’s promise, Congress, the Education Department, and the IRS should ensure that five key issues are addressed. 61 Implementation should:

• Be prompt and carefully designed to ensure unnecessary administrative hurdles no longer prevent borrowers from accessing affordable plans . Data sharing is complex, and it will be helpful for policymakers to identify and understand the specific steps the department and the IRS need to take to facilitate data security. It will also be important to ensure that borrowers no longer experience the consequences of an inefficient system, which are significant.
• Put in place multiple opportunities to engage with struggling borrowers . To more easily access income-driven repayment plans, borrowers will need to agree to having their data shared. Questions remain as to how and when they will give this approval. For example, can borrowers provide approval only when applying for income-driven repayment, or also during other interactions across the loan life cycle, such as the new Annual Student Loan Acknowledgment or when leaving school during exit counseling? 62 Recent Pew research indicates that a significant share of borrowers interact with the repayment system in more than one way, such as by requesting, being placed in, or retroactively using loan deferments or forbearances. 63 Some, however, do not engage before falling behind on loan repayment or in periods of financial stress. This suggests opportunities for engaging with struggling borrowers, both before and after they leave school.
• Ensure that borrowers are clearly informed about payment changes . How and when borrowers who agree to data sharing are notified annually of their new payment is important. This report highlights that participants’ broader financial realities informed how they repaid their loans. For example, those struggling the most with repayment indicated that they had limited resources and needed to cover their costs for transportation, housing, child care, and groceries before paying student loans.
• Ensure that the repayment process remains manageable for those who do not give approval . These borrowers must still be allowed to access income-driven plans by using the IRS Data Retrieval Tool—a mechanism borrowers can manually use to transfer tax information into their plan applications—or submit alternative documentation of their incomes. 64 In addition, a clear process must be established to allow borrowers, such as those who lose their jobs, to manually recertify their incomes before the next year’s tax information is available. As noted above, many participants in Pew’s focus groups reported barriers to repayment, such as confusion driven by inconsistent information, especially around key friction points, such as the transition from school into repayment and enrollment in income-driven plans. Efforts should be made to decrease barriers for all borrowers.
• Align with other efforts by the Education Department to improve the student loan servicing system . For example, as part of Next Gen, there could be opportunities to request borrower agreement in the department’s Aid Summary or Loan Simulator tools.

In addition, policymakers can further improve the system by simplifying and restructuring the process for direct, targeted outreach to struggling borrowers to ensure that borrowers who would benefit most from income-driven plans are aware of and have access to them. For example, providing incentives to servicers to contact at-risk and delinquent borrowers and facilitate their enrollment in income-driven or other plans that lower payments before loans reach 90 days past due could bolster access to affordable options and prevent default.

Transition borrowers into income-driven plans

Borrowers should be encouraged to think about enrolling or be allowed to enroll in income-driven plans during nonstandard times, such as before they leave school and during exit counseling, to reduce the challenges they face during periods of transition. In addition, the Department of Education should require that servicers offer borrowers seeking deferments and forbearances the option to transition into an income-driven plan before paused payments end.

Consider structural changes to income-driven plan design

Income-driven payments may still be unaffordable for some borrowers. In a 2019 Pew report, Texas borrowers who reported being enrolled in income-driven repayment plans indicated they used forbearances and deferments to pause payments, some for long periods, and other studies have also found that many borrowers who struggle to repay are already experiencing other financial distress. 65 And in the focus groups conducted for this report, a number of borrowers reported being enrolled in income-driven plans and using forbearances and deferments to avoid unaffordable payments.

For families facing longer-term financial setbacks, policymakers could consider modifying the structure of income-driven plans. Experts have proposed a range of potential changes, including altering the amount of income that is withheld or basing payments on a combination of income and amount borrowed, among other variables. 66 More data are needed to illuminate how and when borrowers use income-driven plans, and research needs to be done on how and whether such structural changes would meet the needs of those struggling most with delinquency, default, and growing balances, and on the potential cost to taxpayers.

Further, a number of focus group participants reported wanting to have the option to make payments of less than their full monthly bill. Policymakers should consider minimizing negative outcomes for borrowers making partial payments.

Examine the causes of balance growth within the federal student loan portfolio and potential steps to address them

Previous Pew research has shown that identifying at-risk borrowers early in repayment and providing them with resources are key to facilitating successful repayment, and many focus group participants reported that they intended to repay when they began the repayment process but became discouraged watching their balances grow over time. 67 These findings suggest that policymakers should consider ways to keep borrowers engaged and should focus on balance growth throughout repayment.

For instance, the Department of Education student loan ombudsman reports that interest accrual and capitalization commonly lead to borrower confusion and complaints, and Pew’s focus groups highlight that rising balances create frustration and can act as a disincentive for borrowers to continue repaying. 68

Over the past few years, federal lawmakers from both parties have shown an interest in limiting interest accrual and eliminating capitalization. For example, the College Affordability Act, introduced by Democratic members of the House Committee on Education and Labor in 2019, would end interest capitalization on loans in deferment and forbearance. And 2017’s Promoting Real Opportunity, Success, and Prosperity Through Education Reform (PROSPER) Act, introduced by Republican members of the House Committee on Education and the Workforce, would have imposed limits on the interest that could accrue on loans in income-driven repayment plans.

In addition, the Department of Education has recommended eliminating capitalization in all circumstances except for consolidation, while the federal government and some nonprofit organizations have proposed modifying income-driven plans in ways that would result in certain borrowers repaying their loans more quickly, thus limiting interest accrual. 69

Income-driven repayment plans and options for pausing payments provide some necessary relief for struggling borrowers. But as rates of balance growth and the number of borrowers in default increase, policymakers should assess the costs and benefits to borrowers and taxpayers. To do so, analyses must illuminate how interest accrual and capitalization affect borrowers’ repayment decisions and whether changes to the system could address balance growth and meet the needs of borrowers at risk of default.

Higher education is among the most effective strategies available to bolster families’ economic security, and Americans understand that: In a recent survey, 90 percent said that education beyond high school offers pathways for upward economic mobility, and Pew data indicate that most Americans agree that it is reasonable to borrow to pay for higher education, given the benefits of a college degree. 70 But many focus group participants expressed a sense of frustration with the complexity of the repayment system, unaffordable payments, inconsistent communication with servicers, effects on their financial lives, and growing balances. Some said that they regretted borrowing and advise others against it.

These problems indicate that the repayment system is not effectively facilitating affordable repayment in a way that helps borrowers and taxpayers. To improve outcomes and boost borrowers’ long-term repayment success, policymakers should be guided by the significant challenges facing current borrowers

Appendix A: Additional borrower quotes

Appendix B: Methods

Pew contracted with Alan Newman Research (ANR) to conduct two focus groups in each of eight cities— Alexandria, Virginia; Detroit; Kansas City, Missouri; Memphis, Tennessee; Miami; Phoenix; Portland, Maine; and Seattle—for a total of 16 groups, between December 2018 and January 2019. (See Table B.1.) ANR managed recruitment and facility acquisition, and its staff moderated the groups. Pew staff created the screening and discussion guides, trained the moderators, observed the groups, and interpreted and analyzed the results.

Each focus group lasted 90 minutes to two hours, included seven to 12 participants, and generally followed a discussion guide but allowed conversation to develop among participants. The discussion guide included questions about transitioning from school into repayment, loan repayment challenges (including suspending, missing, and struggling to make payments and being delinquent and in default), enrolling in repayment plans, interactions with servicers, and other elements of borrowers’ balance sheets.

Within 24 hours after each focus group, Pew staff produced memos to summarize the themes that emerged from the discussions. The memos in turn informed development of a code book that Pew staff used to analyze the focus groups’ transcripts, along with NVivo software.

Recruitment

Focus group participants were screened to include people who held student debt for their own or someone else’s postsecondary education, had been in repayment for at least two years, and were between the ages of 20 and 60. 71 Postsecondary education was defined as any school, certificate, or training program beyond high school. Participants were not asked to specify which types of loans they had or whether those loans were federal or private. However, federal loans constitute a majority of the student loan market, and participants’ comments were consistent with that fact. 72

A total of 152 borrowers participated in this research. Participants were sorted into four categories of focus groups based on self-reported information about their experiences in repayment, and four focus groups in each category were conducted.

• Had never or only in some months struggled to make payments on their student loans. 73
• Had not defaulted on a student loan in the past two years.
• Were not on track to repay their loans or have them forgiven but thought they would get on track, were on track but weren’t sure they would stay on track, or were on track and were confident they would stay on track.
• Had struggled to make payments on their student loans most months or every month.
• Had defaulted on a student loan in the past two years.
• Were not on track to repay their loans or have them forgiven and did not think they would get on track.

Participants in the general, off-track focus groups had a range of balance sizes. But other focus groups were designed to include only borrowers with certain balances:

• High-balance, off-track borrowers had original balances above $40,000.
• Low-balance, off-track borrowers had original balances below $10,000. 74

The focus groups comprised borrowers with various genders, annual incomes, original balances (for on-track borrowers and general, off-track borrowers), current balances, institutional sectors, highest levels of education, and racial/ethnic groups. (See Table B.2.) Although every effort was made to ensure diversity in the participants, the focus groups are not representative of all borrowers.

The locations for the focus groups were chosen to include racial, age, political, geographic, income, professional and industry, educational attainment, and school-sector diversity.

This report quotes 89 of the 152 borrowers, and no borrower is quoted in any section more than once. Quotations were edited to remove fillers (e.g., “like,” “um”) and extraneous information and for clarity.

Although some quotes might indicate a misunderstanding of the process, this information is pertinent because borrowers often act based on their beliefs and perceptions, even when erroneous, and it is evidence of the complexity in the repayment system.

• Office of Federal Student Aid, “Federal Student Loan Portfolio,” accessed Feb. 28, 2020, https://studentaid.gov/data-center/student/portfolio . Forty-three million federal student loan borrowers includes direct and Perkins loans and loans from the Federal Family Education Loan (FFEL) program. Twenty percent in default includes direct loans and FFEL program loans held by the Department of Education. Although default technically occurs after 270 days of missed payments, these figures measure default after 360 days. 
• Council of Economic Advisers, Executive Office of the President of the United States, “Investing in Higher Education: Benefits, Challenges, and the State of Student Debt” (2016); J.D. Delisle, P. Cooper, and C. Christensen, “Federal Student Loan Defaults: What Happens After Borrowers Default and Why” (American Enterprise Institute, 2018), http://www.aei.org/publication/federal-student-loan-defaults-what-happens-after-borrowers-default-and-why ; L. Ahlman, “Casualties of College Debt: What Data Show and Experts Say About Who Defaults and Why” (the Institute for College Access and Success, 2019), https://ticas.org/sites/default/files/pub_files/casualties_of_college_debt_0.pdf ; M. Brown et al., “Looking at Student Loan Defaults Through a Larger Window” (Federal Reserve Bank of New York, 2015), https://libertystreeteconomics.newyorkfed.org/2015/02/looking_at_student_loan_defaults_through_a_larger_window.html ; J. Scott-Clayton, “The Looming Student Loan Default Crisis Is Worse Than We Thought” (Brookings, 2018), https://www.brookings.edu/research/the-looming-student-loan-default-crisis-is-worse-than-we-thought/ ; the Institute for College Access and Success, “Students at Greatest Risk of Loan Default” (2018), https://ticas.org/sites/default/files/pub_files/students_at_the_greatest_risk_of_default.pdf .
• A. Looney and C. Yannelis, “Most Students With Large Loan Balances Aren’t Defaulting. They Just Aren’t Reducing Their Debt” (Brookings, 2018), https://www.brookings.edu/research/most-students-with-large-loan-balances-arent-defaulting-they-just-arent-reducing-their-debt/ ; M. Brown et al., “Payback Time? Measuring Progress on Student Debt Repayment” (Federal Reserve Bank of New York, 2015), https://libertystreeteconomics.newyorkfed.org/2015/02/payback_time_measuring_progress_on_student_debt_repayment.html .
• Common Manual Unified Student Loan Policy, “Common Manual,” accessed July 31, 2019, http://commonmanual.org/ ; U.S. Government Accountability Office, “Federal Student Loans: Education Could Improve Direct Loan Program Customer Service and Oversight” (2016), https://www.gao.gov/assets/680/677159.pdf .
• Office of Federal Student Aid, “Student Loan Repayment,” accessed Jan. 22, 2020, https://studentaid.gov/manage-loans/repayment .
• Office of Federal Student Aid, “Choose the Federal Student Loan Repayment Plan That’s Best for You,” accessed Jan. 22, 2020, https://studentaid.ed.gov/sa/repay-loans/understand/plans .
• Ibid. Borrowers who consolidate can repay over 30 years.
• Payments may not cover the amount of interest accruing on the loan.
• Office of Federal Student Aid, “Get Temporary Relief, ” accessed Jan. 22, 2020, https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance .
• Subsidized loans do not accrue interest while the borrower is in school at least half time, during the six-month grace period, and during periods of deferment, but generally do accrue interest during forbearances. In contrast, interest typically accrues on unsubsidized loans during school, the grace period, and periods of deferment and forbearance.
• Office of Federal Student Aid, “ Get Temporary Relief”; U.S. Government Accountability Office, “Federal Student Loans: Actions Needed to Improve Oversight of Schools’ Default Rates” (2018), https://www.gao.gov/products/GAO-18-163 . Certain borrowers may be eligible for a range of deferments or forbearances, some of which may not be time-limited.
• Office of Federal Student Aid, “Understand How Interest Is Calculated and What Fees Are Associated With Your Federal Student Loan,” accessed Jan. 22, 2020, https://studentaid.ed.gov/sa/types/loans/interest-rates#capitalization .
• Office of Federal Student Aid, “Student Loan Delinquency and Default,” accessed Jan. 22, 2020, https://studentaid.ed.gov/sa/repay-loans/default . Borrowers who make partial payments are considered delinquent—and can eventually default.
• For older loans, borrowers are transferred directly to a debt collector, known as a guarantee agency.
• Delisle, Cooper, and Christensen, “Federal Student Loan Defaults”; Office of Federal Student Aid, “In Some Cases, You Can Have Your Federal Student Loan Discharged After Declaring Bankruptcy,” accessed Jan. 22, 2020, https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/bankruptcy .
• The Department of Education calculates cohort default rates—the percentage of borrowers who default within three years of beginning repayment—annually for nearly all institutions participating in the federal student loan program; if schools’ default rates are too high, they can lose access to federal grants and loans. Some schools use default management programs or consultants to help manage their rates.
• Federal Trade Commission, “FTC Continues to Crack Down on Student Loan Scams,” Consumer Information (blog), March 8, 2018, https://www.consumer.ftc.gov/blog/2018/03/ftc-continues-crack-down-student-loan-scams ; Inside ARM, “EFC, NCHER, and SLSA Respond to FCC’s Proposal Restricting Effective Contact to Student Loan Borrowers,” May 9, 2016, https://www.insidearm.com/news/00041915-efc-ncher-and-slsa-respond-to-fccs-propos/ ; Office of Federal Student Aid, “Avoiding Student Aid Scams,” accessed Jan. 22, 2020, https://studentaid.gov/resources/scams .
• K. Blagg, “Underwater on Student Debt: Understanding Consumer Credit and Student Loan Default” (Urban Institute, 2018), https://www.urban.org/research/publication/underwater-student-debt/view/full_report ; The Pew Charitable Trusts, “How Do Families Cope With Financial Shocks? The Role of Emergency Savings in Family Financial Security” (2015), http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2015/10/the-role-of-emergency-savings-in-family-financial-security-how-do-families ; The Pew Charitable Trusts, “Are American Families Becoming More Financially Resilient? Changing Household Balance Sheets and the Effects of Financial Shocks” (2017), http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/04/are-american-families-becoming-more-financially-resilient#0-overview ; The Pew Charitable Trusts, “How Income Volatility Interacts With American Families’ Financial Security: An Examination of Gains, Losses, and Household Economic Experiences” (2017), http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/03/how-income-volatility-interacts-with-american-families-financial-security .
• FDR Group, “Taking Out and Repaying Student Loans: A Report on Focus Groups With Struggling Student Loan Borrowers” (2015), https://static.newamerica.org/attachments/2358-why-student-loans-are-different/FDR_Group_Updated.dc7218ab247a4650902f7afd52d6cae1.pdf ; J. Delisle and A. Holt, “Why Student Loans Are Different: Findings From Six Focus Groups of Student Loan Borrowers” (2015), https://static.newamerica.org/attachments/2358-why-student-loans-are-different/StudentLoansAreDifferent_March11_Updated.e7bf17f703ad4da299fad650f47ac343.pdf . 
• Board of Governors of the Federal Reserve System, “Survey of Household Economics and Decisionmaking: 2017 Survey Data” (2018), https://www.federalreserve.gov/consumerscommunities/shed_data.htm .
• Delisle, Cooper, and Christensen, “Federal Student Loan Defaults”; K. Blagg, “Underwater on Student Debt”; N. Dalal and J. Thompson, “The Self-Defeating Consequences of Student Loan Default” (the Institute for College Access and Success, 2018), https://ticas.org/content/pub/self-defeating-consequences-student-loan-default ; Office of Federal Student Aid, “Student Loan Delinquency and Default”;  U.S. Department of Housing and Urban Development, “FHA Single Family Housing Policy Handbook 4000.1” (2019), https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1 .
• Center for Responsible Lending, “Debt and Disillusionment: Stories of Former For-Profit College Students as Shared in Florida Focus Groups” (2018), https://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl-florida-debt-disillusionment-l-aug2018.pdf ; FDR Group, “Taking Out and Repaying Student Loans”; UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It: The Latino Experience in Higher Education” (2018), https://communitycapital.unc.edu/files/2018/04/UnidosUS-Student-Debt-Report.pdf .
• FDR Group, “Taking Out and Repaying Student Loans”; C.L. Johnson et al., “What Are Student Loan Borrowers Thinking? Insights From Focus Groups on College Selection and Student Loan Decision Making,” Journal of Financial Counseling and Planning 27, no. 2 (2016); UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It.”
• E.A. Andruska et al., “Do You Know What You Owe? Students’ Understanding of Their Student Loans,” Journal of Student Financial Aid 44, no. 2 (2014); E. Akers and M. Chingos, “Are College Student Borrowers Borrowing Blindly?” (Brookings Institution, 2014), http://www.brookings.edu/~/media/research/files/reports/2014/12/10-borrowing-blindly/are-college-students-borrowing-blindly_2014.pdf ; Delisle and Holt, “Why Student Loans Are Different.”
• C. Campbell and I. Love, “Lost in the Trillion: A Three-State Comparison of Community College Borrowing and Default” (Association of Community College Trustees, 2017), https://www.acct.org/files/Publications/2017/ACCT_Louisiana_Kentucky_Report_05-04-2017.pdf ; C. Campbell and N. Hillman, “A Closer Look at the Trillion: Borrowing, Repayment, and Default at Iowa’s Community Colleges” (Association of Community College Trustees, 2015), https://www.acct.org/files/Publications/2015/ACCT_Borrowing-Repayment-Iowa_CCs_09-28-2015.pdf ; Congressional Budget Office, “Income-Driven Repayment Plans for Student Loans: Budgetary Costs and Policy Options” (2020), https://www.cbo.gov/publication/55968 .
• Office of Federal Student Aid, “Federal Student Loan Portfolio.”
• U.S. Department of Education, “Sample Data on IDR Recertification Rates for ED-Held Loans” (2014), https://www2.ed.gov/policy/highered/reg/hearulemaking/2015/paye2-recertification.pdf .
• Under some income-driven repayment plans, to be eligible, a borrower must be in partial financial hardship: That is, the borrower would owe more annually under a 10-year Standard Repayment Plan than on an income-driven plan.
• Public Law No: 116-91: Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act (2019), https://www.congress.gov/bill/116th-congress/house-bill/5363 .
• S. Sattelmeyer, “Law Will Ease Access to Affordable Student Loan Repayment If Implemented Effectively” (The Pew Charitable Trusts, 2020), https://www.pewtrusts.org/en/research-and-analysis/articles/2020/03/02/law-will-ease-access-to-affordable-student-loan-repayment-if-implemented-effectively .
• FDR Group, “Taking Out and Repaying Student Loans”; Ahlman, “Casualties of College Debt.”
• Office of Federal Student Aid, “Federal Student Loans for College or Career School Are an Investment in Your Future,” accessed Jan. 22, 2020, https://studentaid.gov/understand-aid/types/loans .
• Office of Federal Student Aid, “Understand How Interest Is Calculated.
• Office of Federal Student Aid, “Do You Have Questions About the Different Types of Income-Driven Repayment Plans?,” accessed Jan. 22, 2020, https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven/questions .
• P. Cooper, “How Much Progress Are Borrowers Making on Their Student Loans?” (American Enterprise Institute, 2017), https://www.aei.org/articles/how-much-progress-are-borrowers-making-on-their-student-loans/ .
• A. Looney and C. Yannelis, “A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults” (Brookings, 2015), https://www.brookings.edu/bpea-articles/a-crisis-in-student-loans-how-changes-in-the-characteristics-of-borrowers-and-in-the-institutions-they-attended-contributed-to-rising-loan-defaults/ .
• Office of Federal Student Aid, “Fiscal Year 2018 Annual Report” (2018), https://www2.ed.gov/about/reports/annual/2018report/fsa-report.pdf .
• Center for Responsible Lending, “Debt and Disillusionment”; Delisle and Holt, “Why Student Loans Are Different.”
• Of the 16 focus groups, eight were held in December 2018 and the rest were held in January 2019. For many borrowers, the 2018 winter holidays were probably the most recent event for which they needed additional money.
• See, for example, FDR Group, “Taking Out and Repaying Student Loans”; Delisle and Holt, “Why Student Loans Are Different”; Office of Inspector General, “Federal Student Aid: Additional Actions Needed to Mitigate the Risk of Servicer Noncompliance With Requirements for Servicing Federally Held Student Loans” (U.S. Department of Education, 2019), https://www2.ed.gov/about/offices/list/oig/auditreports/fy2019/a05q0008.pdf ; U.S. Government Accountability Office, “Federal Student Loans: Actions Needed.” The issue of borrowers, schools, and servicers using or encouraging forbearance has been widely discussed in the field. For example, in 2015 focus groups, borrowers reported that features built into the federal loan system made it easy to pause payments and that it was simple to use forbearance when experiencing financial distress. Participants said that “their loan servicer informed them about the availability of forbearance and they had little difficulty enrolling in it.” Some mentioned learning about the option of pausing payments from mortgage brokers or the IRS. In a 2018 report, the U.S. Government Accountability Office (GAO) indicated that some schools have used consultants to help manage their three-year cohort default rates and that some of these consultants encouraged struggling borrowers to use forbearances “over other potentially more beneficial options for helping borrowers avoid default, such as repayment plans that base monthly payments on income.” The Department of Education’s Office of Federal Student Aid (FSA) did not concur with all of the GAO’s recommendations, noting the limited scope of the GAO’s analysis and that borrowers can incur additional interest costs while in both forbearance and income-driven plans, among other concerns. Finally, a 2019 report from the Department of Education’s Office of the Inspector General indicated that “from January 2015 through September 2017, monthly reports on FSA’s monitoring activities disclosed recurring instances at all servicers of servicer representatives not sufficiently informing borrowers about available repayment options.” In its reply, FSA indicated that neither the report nor additional oversight efforts “have identified material instances of noncompliance by our vendors.”
• FDR Group, “Perceptions and Experiences of For-Profit School Attendees in Orlando (FL): A Focus Group Report” (2017), https://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl-fdr-forprofit-orlando-28sep2017.pdf . 
• D. Herbst, “Liquidity and Insurance in Student Loan Contracts: The Costs and Benefits of Income-Driven Repayment” (2020), https://drive.google.com/file/d/1A-gq_LIqffY6r2gDTcUK9-Y3ZV8Go6SU/view . In certain cases, borrowers may have multiple servicers or loans with different terms and conditions, but recent research also suggests that servicers’ customer service agents may vary in their ability to help borrowers enroll in income-driven repayment plans.
• See, for example, Common Manual Unified Student Loan Policy, “Common Manual”; U.S. Government Accountability Office, “Federal Student Loans: Education Could Improve.”
• U.S. Government Accountability Office, “Federal Student Loans: Key Weaknesses Limit Education’s Management of Contractors” (2015), https://www.gao.gov/products/GAO-16-196T ; U.S. Government Accountability Office, “Federal Student Loans: Education Could Improve.” One servicer indicated to the GAO that it makes over 60 times more outbound calls than it receives inbound calls. In addition, the GAO found that outbound calls sometimes “result in a servicer leaving a message rather than having direct contact with a borrower” and are often made to borrowers who are delinquent and at risk of default, and that some borrowers could “have difficulty obtaining information to manage their loans, and be more at risk for delinquency or default.” The Department of Education’s Office of Federal Student Aid generally concurred with the GAO’s findings and recommendations and noted several steps it has taken to enhance customer service.
• Center for Responsible Lending, “Debt and Disillusionment”; FDR Group, “Perceptions and Experiences”; Delisle and Holt, “Why Student Loans Are Different”; Ahlman, “Casualties of College Debt”; UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It.”
• FDR Group, “Taking Out and Repaying Student Loans.” 
• Ibid.; UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It.”
• UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It."
• Johnson et al., “What Are Student Loan Borrowers Thinking?”; D. Baker, “A Case Study of Undergraduate Debt, Repayment Plans, and Postbaccalaureate Decision-Making Among Black Students at HBCUs,” Journal of Student Financial Aid 48, no. 2 (2019); UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It.”
• Herbst, “Liquidity and Insurance in Student Loan Contracts”; Ahlman, “Casualties of College Debt”; U.S. Department of the Treasury, “A Financial System That Creates Economic Opportunities: Banks and Credit Unions” (2017), https://www.treasury.gov/press-center/press-releases/documents/a%20financial%20system.pdf ; U.S. Department of the Treasury, “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation” (2018), https://home.treasury.gov/sites/default/files/2018-08/A-Financial-System-that-Creates-Economic-Opportunities---Nonbank-Financials-Fintech-and-Innovation_0.pdf .
• Center for Responsible Lending, “Debt and Disillusionment”; Delisle and Holt, “Why Student Loans Are Different”; FDR Group, “Taking Out and Repaying Student Loans”; FDR Group, “Perceptions and Experiences”; Johnson et al., “What Are Student Loan Borrowers Thinking?”; UnidosUS and the UNC Center for Community Capital, “It Made the Sacrifices Worth It.”
• Office of Inspector General, “Federal Student Aid: Additional Actions Needed”;   Office of Federal Student Aid, “NextGen Business Process Operations,” accessed Jan. 22, 2020, https://beta.sam.gov/opp/4ccf4acdbe7d196698111dc16aa94616/view?keywords=nextgen&sort=-modifiedDate&index=&is_active=true&page=2&date_filter_index=0&inactive_filter_values=false&organization_id=100001616 ; Office of Federal Student Aid, “NextGen Enhanced Processing Solution,” accessed Jan. 22, 2020, https://beta.sam.gov/opp/6d0493fffa098998486d9590018e8430/view?keywords=Enhanced%20Processing%20System&sort=-relevance&index=&is_active=true&page=1&organization_id=100001616 .
• Consumer Financial Protection Bureau, “Annual Report of the CFPB Student Loan Ombudsman: Transitioning From Default to an Income-Driven Repayment Plan” (2016), https://files.consumerfinance.gov/f/documents/102016_cfpb_Transmittal_DFA_1035_Student_Loan_Ombudsman_Report.pdf .
• The Pew Charitable Trusts, “Student Loan System Presents Repayment Challenges” (2019), https://www.pewtrusts.org/en/research-and-analysis/reports/2019/11/student-loan-system-presents-repayment-challenges .
• B. Akers, “Experimental Evidence on the Impact of Student Debt Letters on Borrowing, Financial Literacy, and Academic Progress” (Brookings Institution, 2017), https://www.brookings.edu/wp-content/uploads/2017/12/es_20170601_akers-debt-letters.pdf ; D. Fernandes, J.G. Lynch Jr., and R.G. Netemeyer, “Financial Literacy, Financial Education, and Downstream Financial Behaviors,” Management Science 60, no. 8 (2014), https://pubsonline.informs.org/doi/abs/10.1287/mnsc.2013.1849 ; T. Kaiser and L. Menkhoff, “Financial Education in Schools: A Meta-Analysis of Experimental Studies” (CESifo Group Munich, 2019), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3338749 ; B.M. Marx and L.J. Turner, “Student Loan Choice Overload” (National Bureau of Economic Research, 2019), http://econweb.umd.edu/~turner/Marx_Turner_Choice_Overload.pdf ; M. Miller et al., “Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature” (The World Bank, 2014), http://documents.worldbank.org/curated/en/297931468327387954/pdf/WPS6745.pdf ; P. Fernbach and A. Sussman, “Teaching People About Money Doesn’t Seem to Make Them Any Smarter About Money—Here’s What Might,” MarketWatch, Oct. 27, 2018, https://www.marketwatch.com/story/financial-education-flunks-out-and-heres-whats-being-done-about-it-2018-10-10 ; R. Darolia, “An Experiment on Information Use in College Student Loan Decisions” (Federal Reserve Bank of Philadelphia, 2016), http://philadelphiafed.org/research-and-data/publications/working-papers/2016/wp16-18.pdf ; T. Kaiser and L. Menkhoff, “Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?,” The World Bank Economic Review 31, no. 3 (2017), https://academic.oup.com/wber/article/31/3/611/4471971 ; U.S. Financial Literacy and Education Commission, “Best Practices for Financial Literacy and Education at Institutions of Higher Education” (2019), https://home.treasury.gov/system/files/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf ; C. Urban et al., “State Financial Education Mandates: It’s All in the Implementation” (FINRA, 2015), https://www.finra.org/sites/default/files/investoreducationfoundation.pdf .
• K.G. Abraham et al., “Framing Effects, Earnings Expectations, and the Design of Student Loan Repayment Schemes” (National Bureau of Economic Research, 2018), https://www.nber.org/papers/w24484 ; Office of Evaluation Sciences, “Increasing Student Loan Rehabilitation Rates for Defaulted Borrowers” (U.S. General Services Administration, 2016), https://oes.gsa.gov/projects/loan-rehab-rates/ ; Office of Evaluation Sciences, “Increasing IDR Applications Among Eligible Student Loan Borrowers Through Targeted Messages” (U.S. General Services Administration, 2016), https://oes.gsa.gov/projects/idr-applications-targeted-messages/ ; Office of Evaluation Sciences, “Increasing IDR Re-Certification Among Student Borrowers” (U.S. General Services Administration, 2016), https://oes.gsa.gov/projects/idr-re-certification/ .
• Office of Federal Student Aid, “NextGen Business Process Operations”; Office of Federal Student Aid, “NextGen Enhanced Processing Solution.”
• M. Brown, “Keeping the Promise: New Tools for a Better-Than-Ever Aid Experience,” Homeroom (blog), U.S. Department of Education, Feb. 24, 2020, https://blog.ed.gov/2020/02/keeping-promise-new-tools-better-ever-aid-experience/ ; Office of Federal Student Aid, “Try Loan Simulator,” accessed March 17, 2020, https://studentaid.gov/loan-simulator/ .
• The Pew Charitable Trusts, “Student Loan System Presents Repayment Challenges.”
• R.H. Thaler, “Financial Literacy, Beyond the Classroom,” The New York Times, Oct. 5, 2013, https://www.nytimes.com/2013/10/06/business/financial-literacy-beyond-the-classroom.html .
• Sattelmeyer, “Law Will Ease Access."
• Office of Federal Student Aid, “2019 Federal Student Aid (FSA) Training Conference: First Posting of Unanswered Open Forum Questions” (2019), https://fsaconferences.ed.gov/conferences/library/2019/2019OpenForumQA.pdf .
• Office of Federal Student Aid, “Data Retrieval Tool Available for Income-Driven Repayment Plan Application,” accessed March 2, 2020, https://www.ed.gov/news/press-releases/data-retrieval-tool-available-income-driven-repayment-plan-application ; Office of Federal Student Aid, “If Your Federal Student Loan Payments Are High Compared to Your Income, You May Want to Repay Your Loans Under an Income-Driven Repayment Plan,” accessed March 2, 2020, https://studentaid.gov/manage-loans/repayment/plans/income-driven .
• Delisle and Holt, “Why Student Loans Are Different”; K. Blagg, “Underwater on Student Debt”; The Pew Charitable Trusts, “Student Loan System Presents Repayment Challenges.”
• See, for example, D. Cheng and J. Thompson, “Make It Simple, Keep It Fair: A Proposal to Streamline and Improve Income-Driven Repayment of Federal Student Loans” (the Institute for College Access and Success, 2017), https://ticas.org/affordability-2/make-it-simple-keep-it-fair/ ; J.D. Delisle, “How to Make Student Debt Affordable and Equitable” (American Enterprise Institute, 2019), https://www.aei.org/research-products/report/how-to-make-student-debt-affordable-and-equitable/ .
• Office of Federal Student Aid, “FY 2017 Annual Report” (2017), https://www2.ed.gov/about/reports/annual/2017report/fsa-report.pdf ; Office of Federal Student Aid, “Annual Report FY 2019” (2019), https://www2.ed.gov/about/reports/annual/2019report/fsa-report.pdf .
• Cheng and Thompson, “Make It Simple, Keep It Fair”; Office of Federal Student Aid, “Annual Report FY 2019”; U.S. Department of Education, “President’s FY 2021 Budget Request for the U.S. Department of Education,” https://www2.ed.gov/about/overview/budget/budget21/index.html .
• R. Fishman et al., “Varying Degrees 2019” (New America, 2019), https://www.newamerica.org/education-policy/reports/varying-degrees-2019/ ; S. Sattelmeyer and R. Williams, “Americans Support Federal Action to Make Student Loan Repayment Easier,” Oct. 14, 2019, https://www.pewtrusts.org/en/research-and-analysis/articles/2019/10/14/americans-support-federal-action-to-make-student-loan-repayment-easier .
• Five of 152 participants borrowed only for someone else. Nine of 152 borrowed for themselves and someone else.
• The College Board, “Trends in Student Aid 2019: Highlights” (2019), https://research.collegeboard.org/trends/student-aid/highlights ; The College Board, “Trends in Student Aid 2019: Total Federal and Nonfederal Loans by Type Over Time” (2019), https://research.collegeboard.org/trends/student-aid/figures-tables/total-federal-and-nonfederal-loans-type-over-time . Although federal student loans make up most of the postsecondary education financing market, private loans were more common before the Great Recession than they are today.
• If a respondent asked, “What do you mean by ‘struggled?’” the recruiter responded, “For example, you could have missed or not made payments, not been able to pay the full amount you owe, defaulted on your loans, or had to make choices between paying your student loan and paying other bills.”
• A similar number of high-balance, off-track borrowers had debt in each of these ranges: $40,000-$60,000, $60,000-$80,000, and $80,000 and above. Because of recruiting challenges in two locations, seven low-balance, off-track borrowers had original principal balances between $10,000 and $17,000.  

Don’t miss our latest facts, findings, and survey results in The Rundown

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The novel coronavirus pandemic and related economic downturn have taken a significant toll on households and businesses around the country. Congress acted to help mitigate the serious challenges confronting student loan borrowers and servicers—companies hired by the U.S. Department of Education to collect and help borrowers manage payments—and responded with bipartisan legislation.

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The novel coronavirus has already taken a significant societal and economic toll, and the long-term effects on families’ balance sheets are only beginning to be understood. Importantly, the spread of COVID-19 has created challenges for student loan borrowers and servicers.

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7.2M Americans Over 50 Hold Student Debt, New Report Shows

Urban Institute researchers say the financial burden not only puts a strain on the borrowers themselves but also the social welfare programs designed to be their safety net.

By  Jessica Blake

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A recent report from the Urban Institute shows student loan debt isn’t just harming young people’s financial futures—it’s weighing on older generations, too.

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Student loan forgiveness was a key component of President Biden’s 2020 campaign. While the policy has faced legal and legislative challenges , the issue of Americans’ more than $1 trillion in student debt has been thrust into the national conversation, mostly centering on loan forgiveness for Generation Z young professionals and middle-aged millennials.

However, a recent series of reports and blog posts published by Urban Institute shows that older adults are also struggling to pay back their student loans.

By analyzing a nationally representative sample of credit records from roughly four million adults aged 50 and older, Urban Institute’s report concludes that as of August 2022, approximately 6 percent of older adults—or 7.2 million Americans—have yet to pay off their student loans. Among those same borrowers, 8 percent, or 580,000 individuals, are behind on payments. The median amount of delinquent debt was approximately $11,500.

It’s a financial burden that can leave many seniors struggling to retire and ultimately exacerbates the poverty levels of older Americans, Urban Institute researchers say. As a result, it not only strains the individuals but also the social welfare programs designed to function as a safety net.

The findings of this report reflect similar results from previous studies conducted by groups such as the Education Trust and AARP. But, despite the wealth of data, Jason Cohn, a research associate from the Urban Institute’s Center on Education Data and Policy, noted that the impact of loan debt on older adults is often overlooked. But when you draw attention to the fact that loan debt can force seniors to work far longer before retirement or exit without the dignity of a plan for long-term care, it can give people a new perspective.

“Looking at it through this lens of ‘Will they be able to retire with financial security?’ is something that’s a little bit different,” he said.

What’s not different, regardless of age, is the trend of racial disparities among debt holders.

The report’s findings show that individuals aged 50 and older from American Indian and Alaska Native (AIAN), Black, and Hispanic communities are disproportionately burdened by student debt. The overall delinquency rate among all borrowers was 8 percent, but the rates among racial minority groups were as much as seven percentage points higher at 10, 13 and 15 percent for Hispanic, Black and AIAN communities, respectively.

Financial policy experts cite labor market discrimination, wage gaps, inequities in generational wealth and prejudices such as redlining, underbanking and lack of access to tax-advantaged savings as systemic barriers that make wealth accumulation challenging for racial minorities, particularly for Black and Indigenous Americans and people of color (BIPOC).

As a result of these barriers, they say, BIPOC individuals are more likely to depend on student loans to put themselves or their children through higher education.

“These disadvantages can compound over decades within and across generations, making these borrowers less able to repay their loans on time,” wrote Mingli Zhong, an Urban Institute senior research associate who specializes in borrowing behavior. “Over all, older adults are carrying more debt, not just student loan debt but all kinds of debt [medical, mortgage, etc.] into retirement,” she later told Inside Higher Ed .

That, combined with the fact the U.S. population is aging and more people are nearing retirement, has consequences. Later in life, borrowers who can’t pay off their student loan debt are more likely to experience poverty and rely on social welfare safety net programs such as the Supplemental Nutrition Assistance Program, Medicaid and Supplemental Security Income.

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In some cases debt can be so crippling it puts an individual at risk of losing a portion of their Social Security benefits—a lifeline of guaranteed income for retirees. In 2015, at least 114,000 Americans had their Social Security benefits garnished because they couldn’t make their student loan repayments, the Urban Institute reports. Annual tax refund benefits can also be seized to pay off delinquent loans.

Zhong said she anticipates an increasing strain on these and other social safety nets over the course of the next five to 20 years. Retirement planning is already becoming an increasingly personal responsibility, she said, but growing student loan debt among seniors only furthers that.

In response, the Urban Institute recommends federal policymakers respond to the acute symptoms by trying to cancel debt for long-term borrowers, establishing fair repayment terms, encouraging employers to match contributions to student loan payments and ensuring that older borrowers can keep their Social Security benefits.

The Biden administration is already attempting to take some of these steps. The Education Department in April released a set of draft rules that would ease the burden of student debt among older borrowers by offering one-time relief to those with Parent Plus loans and those who have been repaying their own loans for 20 years or more.

The public has sharply divided views on the subject of student debt relief, however, and it’s uncertain whether Biden’s policies will take effect before the end of his term. But some student loan policy experts hope that the timing of Urban’s report release could help increase support.

“The misconception that student debt is a young person’s issue is a trope that opponents of debt relief like to push out,” said Aissa Canchola Bañez, policy director for the Student Borrower Protection Center. “And so, the context in which this report is being done really gives us a chance to illustrate the positive impact that the Biden-Harris administration’s upcoming rules, when they are finalized, will have on folks, particularly older Americans.”

But not all policy experts agree.

“All these recommendations are doing is just further subsidizing the problem,” said Michael Brickman, a senior fellow at the American Enterprise Institute. “As we’re trying to treat the symptoms, we’re making the disease worse.”

As a representative of the conservative think tank, Brickman believes the underlying issue—that college programs cost too much and often don’t deliver a strong enough financial return—must be addressed first.

He suggested that policymakers must hold the institutions themselves accountable for student debt, by requiring them to co-sign student loans.

“Institutions should not be able to cash checks from the government to pay for programs that consistently do not deliver a financial return,” Brickman said. “The college or university should be held accountable, and they should have direct and significant skin in the game with respect to what their students borrow.”

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Supreme Court kills Biden's student debt plan in a setback for millions of borrowers

Nina Totenberg

Meghanlata Gupta

The Supreme Court in Washington, D.C., on Tuesday, June 27 as the term heads into what's expected to be the final week. Bloomberg/Bloomberg via Getty Images hide caption

The Supreme Court in Washington, D.C., on Tuesday, June 27 as the term heads into what's expected to be the final week.

Follow NPR's live coverage for the latest updates and reaction to this opinion.

In a highly anticipated decision, the Supreme Court on Friday struck down President Biden's groundbreaking plan to forgive some or all federal student loan debt for tens of millions of Americans.

By a 6-to-3 vote on ideological lines, the high court ruled that federal law does not authorize the Department of Education to cancel such student loan debt.

Writing for the majority, Chief Justice John Roberts said: " The authority to 'modify' statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them."

Siding with the states, Justice Amy Coney Barrett said, in her concurring opinion, said the major questions doctrine "reinforces" the majority's conclusion "but is not necessary to it."

In her dissent, Justice Elena Kagan criticized the court's "overreach, and noted she would have decided the states didn't have the right to sue.

"The plaintiffs in this case are six States that have no personal stake in the Secretary' loan forgiveness plan," she said. "They are classic ideological plaintiffs: They think the plan a very bad idea, but they are no worse off because the Secretary differs."

Last August, President Biden told federal student loan borrowers that the U.S. government would cancel up to $20,000 of debt for low income students who had received a Pell Grant to attend college, and up to $10,000 for the vast majority of remaining borrowers. He cited a 2001 law that allows the Secretary of Education "to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies." That is the same law that President Trump used to freeze federal student loan payments and interest accrual due to the COVID pandemic.

Soon after Biden's announcement, however, six states filed a lawsuit to stop the implementation of the debt cancellation plan, arguing that Biden exceeded his authority under the federal law. The Supreme Court ultimately stepped in to review the case.

The high court's ruling signifies another example of its expanding use of the "Major Questions Doctrine," the idea that Congress must speak very clearly when granting power to executive agencies like the Department of Education to make decisions about issues that are politically or economically significant. And, as the doctrine says, if there is any ambiguity to whether Congress has granted this power, courts should not presume that Congress did so. Last year, the high court struck down the Secretary of Labor's vaccine mandate on these grounds.

What the Supreme Court's rejection of student loan relief means for borrowers

Conservative and liberals split at Supreme Court over Biden student loan plan

The decision comes as a disappointment to federal student loan borrowers who were eligible for relief under the plan — as many as 43 million borrowers, or roughly 1 in 8 Americans.

Come fall, student loan interest accrual and payments will begin again, affecting borrowers in all 50 states.

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