Precedents Cited

The Court referenced several key precedents that influence its decision:

• MCI Telecommunications Corp. v. American Telephone & Telegraph Co. (512 U.S. 218, 1994): Clarified that the term "modify" should be interpreted conservatively, limiting it to minor or moderate changes rather than fundamental rewrites of statutory schemes.
• West Virginia v. EPA (597 U.S.____, 2022): Reinforced the "major questions doctrine," requiring clear congressional authorization for agency actions of vast economic and political significance.
• ARKANSAS v. TEXAS (346 U.S. 368, 1953): Established that a state can have standing to sue based on injuries to its instrumentalities.
• LEBRON v. NATIONAL RAILROAD PASSENGER CORPORATION (Amtrak) (513 U.S. 374, 1995): Affirmed that government instrumentalities remain part of the government for various legal purposes.

Legal Reasoning

The Supreme Court's legal reasoning can be distilled into several core points:

• Interpretation of "Waive or Modify": The Court emphasized that "modify" entails only minor or incremental changes to existing statutory provisions. The Secretary's initiative to cancel $430 billion in student debt transcends this scope, constituting a fundamental alteration of the Higher Education Act.
• Major Questions Doctrine: Applying the major questions doctrine, the Court asserted that agency actions with significant economic and political implications require explicit congressional authorization. The Secretary's unilateral establishment of a broad loan forgiveness program lacked such clear statutory backing.
• Standing via Instrumentality: The Court upheld Missouri's standing to sue by recognizing MOHELA as a state-created instrumentality. The financial harm to MOHELA directly translates to harm inflicted upon Missouri, thus satisfying Article III standing requirements.

Impact

The Court's decision has wide-ranging implications:

• Agency Limitations: Reinforces the boundaries within which federal agencies must operate, particularly concerning major policy initiatives. Agencies are reminded that substantial changes require explicit legislative backing.
• Congressional Authority: Strengthens Congress's role in major policy decisions, ensuring that significant economic and political actions remain under legislative control rather than being delegated to administrative bodies without clear authorization.
• Student Loan Policies: Temporarily halts the aggressive loan forgiveness plan, affecting millions of borrowers and setting a precedent that such expansive relief measures need solid legislative foundation.

Standing

Standing is a legal principle that determines whether a party has the right to bring a lawsuit. To have standing, the plaintiff must demonstrate a concrete and imminent injury directly resulting from the defendant's actions. In this case, Missouri has standing through its financial instrumentality, MOHELA, which is directly affected by the Secretary's loan forgiveness plan.

Instrumentality

An instrumentality refers to a state-created entity that performs governmental functions. MOHELA is deemed an instrumentality of Missouri, meaning it is part of the state's machinery for managing student loans. As such, harm to MOHELA constitutes harm to the state itself.

Waive or Modify

The terms "waive or modify" in the HEROES Act pertain to the Secretary's ability to relax or alter existing statutory provisions. However, the Court interprets "modify" as limited to minor changes, not allowing for extensive rewrites or the creation of entirely new programs.

Major Questions Doctrine

The Major Questions Doctrine is a judicial principle that requires clear congressional authorization for agency actions with significant economic and political consequences. This doctrine prevents agencies from overstepping their authority by making major policy decisions without explicit legislative support.