The quagmire created by litigation against President Biden’s student loan initiatives offers a preview, if anyone wants one, of the potential effects of recent Supreme Court decisions weakening the power of executive agencies that enact and enforce regulations governing myriad aspects of business conduct—the “administrative state.” The picture is not pretty: time-consuming and duplicative court proceedings, conflicting rulings issued by different courts, and suffering for those who have trusted the government to do what it says it will do.

Since April 2024, attorneys general from Republican-led states have filed three lawsuits in different federal courts to challenge federal regulations intended to make student loan payments less burdensome for millions of borrowers. These lawsuits have resulted in overlapping injunctions blocking several of these new rules, as described in more detail below; The latest lawsuit targets and seeks to block rules that had not even been finalized at the time of the complaint, representing a radical expansion of the power to shape regulation through selective and preemptive litigation. As a result of messy and complicated litigation in several districts, the federal Department of Education has essentially suspended a new repayment plan that reduces the monthly obligations of eligible borrowers, a move that temporarily protects them at the expense of delaying the eventual debt relief contemplated by the program.

This article first places student loan lawsuits in the context of three recent Supreme Court decisions that together advance an effort to undermine the executive power to regulate, and then turns to the mess the courts have created with federal student aid.

In short, this is the doctrinal context, which may be familiar given the volume of writing on these decisions. First, in Biden v. Nebraska, the conservative supermajority ruled that the Biden administration lacked the authority to cancel between $10,000 and $20,000 per student loan borrower under a provision of the law the administration relied on, the Higher Education Relief Opportunities for Students Act of 2003. Such relief constituted too bold a policy move for the statutory language on which it was based, the conservative justices explained, applying the significant issues doctrine. But it is the decision to accept the case at all that sets a troubling precedent relevant to the critique here: Parties suing to block the cancellation plan would obviously not suffer a direct or certain loss. This implicates the doctrine of standing, the idea that federal courts only hear “cases or controversies” involving people who have something to lose. Under the theory advanced by the Republican attorneys general who filed the suit, a company that serviced student loans—tracking borrowers, collecting payments, communicating with them—could suffer financial losses in the form of reduced revenue from servicing the loans if borrowers’ loans were canceled as a result of the Biden administration’s proposal. The problem with this theory is that the plaintiffs were states, not companies that serviced student loans. The Court found that one plaintiff state, Missouri, had standing because it had created a private company that serviced the loans, and the majority accordingly concluded that financial harm to the servicer could affect the state. The Court reached this conclusion even though that company operated independently of the state—to the point that the state had to use open records law to compel the servicer to provide information to support the lawsuit. In this case, the justices opened the courthouse doors to partisan plaintiffs who had only tenuous exposure to the government action they disliked, rejecting more limited legal action, such as, for example, simply demanding compensation for any losses ultimately suffered. This willingness to go big when a case presents an opportunity to inflict political damage on an ideological opponent may mean that the doctrine of standing will not undergo a wholesale evolution (after all, other cases have gone in the opposite direction), but only a partisan, selective, tactical expansion.

Then, in Loper Bright, decided last year, the conservative supermajority overturned Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., the well-known 1984 decision in which the Court called for judicial deference to an agency’s “reasonable interpretation” of a law that its regulations implement. In Loper Bright, Chief Justice John Roberts declared that, in reality, “agencies do not have special jurisdiction to resolve statutory ambiguities.” Returning to the question of who does, the Supreme Court affirmed that “courts do.” Time will reveal whether this is a significant power grab by the judiciary at the expense of the executive branch, but the ruling seems to invite any regulated entity dissatisfied with an agency rule to sue. It will be enough for a judge to disagree with an agency’s reasoning, and regulators, mindful of the increased risk of litigation, may think smaller as a result.

Finally, in Corner Post, also decided last year, the conservative supermajority essentially eliminated the statute of limitations that would otherwise limit challenges to agency actions. The Court ruled that plaintiffs could sue within six years of any harm caused by a regulatory action, rather than within six years of the action itself. (A separate federal law dictated the six-year statute of limitations but did not specify when the clock would start to run.) Thus, a company dissatisfied with a rule that was adopted decades ago could nonetheless sue to block enforcement of that rule if the rule had an adverse effect on the company’s finances in the past six years. Perhaps the dissatisfied owners of an affected company will simply create a new business entity to suffer the harm again and then sue.

The three decisions—Biden v. Nebraska, Loper Bright Enterprises v. Raimondo, and Corner Post v. Board of Governors—together form a trident aimed squarely at executive agencies. The conservative supermajority on the Court removed doctrinal obstacles to judicial reconsideration of agency actions, dramatically weakened the limits on when legal challenges to agency actions can be brought, and allowed lawsuits by parties who had virtually nothing at stake beyond mere disagreement over policy. And once these decisions open the courts’ doors, they will be able to apply the “significant questions doctrine,” used so forcefully by conservative justices in West Virginia v. Environmental Protection Agency, to undo agency actions by arguing that if Congress had wanted to grant the regulatory authority in question, lawmakers would have said so more specifically than they did. The kind of litigation these rulings invite is not only intended to prevent new policy initiatives but also to undo past rules and, moreover, to shape future rules in favor of self-interested and well-funded litigants.

In student loan lawsuits, the plaintiffs are not businesses suffering regulatory harm, but as the majority in Biden v. Nebraska demonstrated, that need not matter. The story begins with the Department of Education’s announcement in 2023 of a new repayment plan for student loan borrowers, called Saving on a Valuable Education, or “SAVE.” The plan tied borrowers’ monthly payment obligations to income and family size, like previous income-linked repayment plans, but reduced the share of discretionary income used to determine required monthly payments, zeroed out obligations for more borrowers by adopting a more generous definition of discretionary income subject to that repayment calculation, and provided for debt cancellation after ten years of payments for borrowers whose initial balance was $12,000 or less. While not a mass cancellation, the SAVE program was and is significantly more generous than previous repayment plans. Several million borrowers enrolled in it.

Two lawsuits, one led by Missouri and the other by Kansas, attacked the legal authority of the SAVE plan, which was based on provisions of the Higher Education Act of 1965 that required the Department to create an “income-contingent repayment plan.” The provision containing that phrase does not explicitly provide for debt cancellation, but for decades the Department has approved cancellation of remaining debt for borrowers who have reached the end of a plan’s repayment terms; this is consistent with statutory language that authorized another, earlier repayment plan and that required the Department to “pay or cancel any outstanding balance” owed by borrowers who made payments on that plan for at least ten years and met certain other conditions. One lawsuit, filed in the Eastern District of Missouri, claimed that the authority granted for one repayment plan did not extend to another, and that absent explicit language empowering it to do so, the Department could not cancel borrowers’ remaining debts. The trial court found that claim persuasive enough to issue a preliminary injunction against debt cancellation under SAVE. The injunction did not prohibit other aspects of the plan. Meanwhile, the other lawsuit, filed in Kansas, resulted in a preliminary injunction that prohibited only parts of the SAVE plan that were to take effect on July 1 of this year, but not those already in effect. Then came the appeal. Still confused?

A three-judge panel of the Eighth Circuit Court of Appeals took up the Missouri case, found that the new repayment plan was an “order of magnitude broader than anything that had been done before,” and issued an injunction pending appeal prohibiting the Department from canceling principal or interest and not collecting accrued interest—one of SAVE’s key affordability features. Such specificity in the appellate court’s order was necessary because the trial court’s prior preliminary injunction had prohibited debt cancellation, but not other aspects of the SAVE plan. The appellate panel’s injunction extended beyond the bounds of the states’ initial complaint and calls into question the Department’s statutory authority for other repayment plans that include cancellation clauses and have been in effect for decades. Avoiding such courtroom searches through agency regulations was one reason for extending deference to executive rulemaking.

For the Tenth Circuit Court of Appeals, which heard the Kansas case (now the Alaska case because the trial court found that only some states had standing to proceed), this situation was confusing enough that the justices first stayed the trial court’s injunction pending appeal and then ordered the parties to provide information about the meaning of the Eighth Circuit’s order.

The Department and the states in both cases attempted to get the Supreme Court to intervene; Justices Gorsuch and Kavanaugh rejected the requests. The Department continued its policy of not charging payments or interest to borrowers who already enrolled in the SAVE plan. For now, for these borrowers, litigation has produced at least this windfall, but it is unclear how long it will last.

A third case has pushed the boundaries of possible litigation against agencies even further. The same group of Republican attorneys general filed suit in federal court in Georgia to block the Department of Education from canceling student debt pursuant to regulations the Department had not even issued yet. In doing so, they asserted the same theory of standing that the Supreme Court condoned in Nebraska. The Department, the plaintiffs warned, was “implementing this [cancellation] plan without publication.” The district court granted the plaintiffs’ request for a temporary restraining order, finding that if the purported “rule goes into effect, defendants will unlawfully cancel billions of dollars in student loans.” Regardless of what ultimately happens in this litigation, the implications of the plaintiffs’ initial success are profound: They have successfully prevented a federal regulatory initiative without even waiting for an agency to issue final rules. In the future, entities or individuals potentially subject to regulation can use the litigation to shape any rule, usurping the agencies’ already dwindling authority. Private litigants with means will thus be able to supplant agencies that, whatever their shortcomings, are at least ultimately democratically accountable.

The Supreme Court will finally have the opportunity to resolve all three cases by winding its way through the federal courts. Conservative justices face a dilemma: Partisan political priorities dictate a decision adverse to the Biden administration. But the complexity of unravelling borrowers’ repayment plans—especially if the conservative supermajority finds that several repayment plans, not just the newest one, lack legal authority—could prompt the Education Department to extend its payment pause indefinitely on the grounds that the aid programs have become unmanageable. Presumably someone, perhaps anyone, could file a lawsuit to force the Department to collect loan payments, but that lawsuit would have to identify the legal basis for borrowers’ repayment obligation, and Chief Justice Roberts in Biden v. Nebraska wrote that “[n]o specific provision of the [Higher] Education Act establishes an obligation on the part of student borrowers to repay the government.” That sounds pretty conclusive.

It would be ironic if the Biden administration could win by losing, proceeding to cancel student debt obligations as a practical matter because of the mess the courts engineered in federal student aid programs, and then directing any complaints about the policy to the judiciary. The executive agency would be in a constitutional crucible, unable to fulfill its statutory mandate and also unable to comply with a judicial provision. This prospect, more than any argument about harm to borrowers, about methods of interpreting statutes, or about the need to preserve the administrability of federal regulatory schemes generally, may prompt the courts to take a more measured approach, shutting down cancellation efforts prospectively but not retrospectively, for example. Pragmatism and politics might save the day for borrowers, but this is no way to manage a government program. The consequences of the chaotic state of federal student loans for borrowers are troubling enough and may take years to become apparent, but the effectiveness of partisan litigation by Republican attorneys general should serve as a warning of future challenges to agency actions more broadly. Because the Supreme Court in that trio of decisions discussed above has relaxed the requirements that plaintiffs must satisfy to establish standing to sue, has eliminated the requirement that courts show deference to the judgment of executive agencies implementing the law, and has opened up the time frame within which plaintiffs can claim an injury establishing such standing, we are entering a doctrinal world in which someone, perhaps anyone, can successfully attack — or through litigation preempt or rewrite — any rule, in any federal court, at any time.