143 S. Ct. 2355 (2023)
Title IV of the Higher Education Act of 1965 (Education Act) governs federal financial aid mechanisms, including student loans. The Act authorizes the Secretary of Education to cancel or reduce loans in certain limited circumstances, for example for certain public servants, for borrowers who have died or become permanently and totally disabled, for bankrupt borrowers, and for borrowers whose schools falsely certify them or close. The issue presented is whether the Secretary has authority under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) to depart from the Education Act's existing provisions and establish a student loan forgiveness program that would 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," but waivers or modifications may be issued only "as may be necessary to ensure" that recipients affected by a national emergency "are not placed in a worse position financially in relation to that financial assistance because of [the national emergency]."
In 2022 the Secretary invoked the HEROES Act to issue "waivers and modifications" reducing or eliminating the federal student debt of most borrowers: borrowers with eligible federal loans and adjusted gross income below $125,000 in either 2020 or 2021 qualified for up to $10,000 in discharge, and those who previously received Pell Grants qualified for 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
At least Missouri has standing to challenge the Secretary's program. Article III requires a plaintiff to have suffered an injury in fact that is concrete and imminent, traceable to the challenged conduct, and likely redressable. The Secretary concedes that the 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 by the State an instrumentality, created by the State, supervised by the State, and serving a public function. The harm to MOHELA in performance of its public function is necessarily a direct injury to Missouri. With Article III satisfied, the Court need not consider other standing arguments.
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 it does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal. The Secretary's power to "modify" does not permit basic and fundamental changes in the scheme designed by Congress; "modify" ordinarily carries a connotation of increment or limitation and means to change moderately or in minor fashion. The authority to "modify" allows modest adjustments and additions, not transformation. Prior HEROES Act modifications were minor; the challenged program creates a novel and fundamentally different loan forgiveness regime, extending discharge to nearly every borrower and thereby overturning Congress's detailed choice of narrow discharge grounds.
The Secretary's reliance on the separate term "waive" and the combination "waive or modify" does not rescue the program. Historically, waiver under the HEROES Act has been used to nullify particular legal requirements, not to replace them with an entirely new statutory regime. The Secretary cannot simply waive provisions root and branch and then fill the empty space with radically new text. The procedural requirement that the Secretary publish notice including "the terms and conditions to be applied in lieu of such statutory and regulatory provisions" is a reporting obligation and does not implicitly authorize wholesale substitution that distorts the fundamental nature of the provisions altered.
The Secretary's appeal to congressional purpose—arguing that Congress intended to grant substantial discretion to respond to unforeseen emergencies—cannot overcome the textual limits. Given the history and breadth of the authority asserted and the economic and political significance of the Secretary's program, the Court requires clear congressional authorization for such sweeping action. The HEROES Act provides no such authorization under ordinary tools of statutory interpretation, let alone the heightened showing required when an agency asserts authority over matters of vast economic and political significance.
Disposition
The judgment of the District Court for the Eastern District of Missouri is reversed and the case remanded for further proceedings consistent with the opinion. The Government's application to vacate the Eighth Circuit's injunction is denied as moot.
Congress first authorized federal student loans in 1958. Outstanding federal student loans now total roughly $1.6 trillion extended to some 43 million borrowers. In 2022 the Secretary established a comprehensive student loan forgiveness program invoking the HEROES Act, canceling roughly $430 billion of federal student loan balances and substantially reducing the median amount owed for millions of borrowers. Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.
The Higher Education Act of 1965 was enacted to increase educational opportunities and to assist in making postsecondary education available to eligible students. Title IV restructured federal financial aid and established three types of federal student loans: Direct Loans (funded by the federal fisc), Perkins Loans (government-subsidized loans made by schools), and Federal Family Education Loans (FFELs) made by private lenders and guaranteed by the Federal Government. The Education Act in detail specifies applicable interest rates, fees, repayment plans, and the limited circumstances in which the Secretary may cancel or forgive loans—circumstances such as public service forgiveness for certain professions, death, total and permanent disability, bankruptcy, and certain school malfeasance or closures.
After the September 11 attacks, Congress enacted short-term waiver authority and later enacted the HEROES Act in 2003, extending authorization to any war or national emergency. By its terms the Secretary "may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV ... as the Secretary deems necessary in connection with a war or other military operation or national emergency." The Secretary may issue waivers or modifications only "as may be necessary to ensure" that recipients who are affected individuals "are not placed in a worse position financially ... because of their status as affected individuals." The Act defines "affected individual" and defines "national emergency" as a national emergency declared by the President.
Immediately after the Act, the Secretary issued two dozen waivers and modifications limited in scope. In response to the COVID-19 pandemic, the President declared a national emergency on March 13, 2020, and the Secretary suspended loan repayments and interest accrual for federally held student loans; Congress and the Executive took further measures. In August 2022, the Department announced waivers and modifications under the HEROES Act to reduce and eliminate student debts directly. Prior Department guidance had concluded the Secretary lacked authority for blanket mass cancellation, but that memorandum was rescinded and replaced with one concluding that the HEROES Act could be used for targeted loan cancellation addressing the pandemic's harms. The Secretary then proposed and published notice of waivers and modifications in the Federal Register.
The terms of the debt cancellation plan: borrowers with adjusted gross income below $125,000 in either 2020 or 2021 with eligible federal loans would have balances discharged up to $10,000; Pell Grant recipients would qualify for up to $20,000. 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. The Department estimated about 43 million borrowers qualify, and the Congressional Budget Office estimated roughly $430 billion in canceled principal.
Six States moved for a preliminary injunction. The District Court held none had standing and dismissed. The Eighth Circuit reversed in part and issued a nationwide preliminary injunction pending appeal, concluding Missouri likely had standing through MOHELA, a public corporation that holds and services student loans, and that the challenge raised substantial questions on the merits.
Before addressing legality, Article III standing must be satisfied. A plaintiff must have a personal stake—an injury in fact that is concrete, imminent, traceable to the challenged conduct, and redressable. If at least one plaintiff has standing, the suit may proceed. We conclude that the Secretary's plan harms MOHELA and thereby directly injures Missouri, conferring standing.
Missouri created MOHELA as a nonprofit government corporation to participate in student lending, owning over $1 billion in FFELs and servicing nearly $150 billion in federal loans. MOHELA receives administrative fees for accounts it services, amounting to substantial revenue. Under the Secretary's plan roughly half of federal borrowers would have loans fully discharged; MOHELA would no longer service those accounts, costing it an estimated $44 million a year in fees. That financial harm is an injury in fact directly traceable to the Secretary's plan, as the Government concedes.
MOHELA is a public instrumentality of the State: created to perform the public function of aiding access to student loans, empowered to invest in or finance student loans, to service loans and collect reasonable fees, and to fund educational projects in Missouri. Its board consists of state officials and gubernatorial appointees; the Governor may remove board members for cause; and the Authority reports annually to the Missouri Department of Education. By law and function MOHELA is an instrumentality of Missouri, and harm to MOHELA in conducting its public function is a direct injury to Missouri.
Arkansas v. Texas is analogous: there the Court allowed the State to sue to protect interests of an official state instrumentality. The Secretary emphasizes MOHELA's separate corporate personality, but instrumentality status can mean the entity is part of the Government for many purposes. Where a State has been harmed in carrying out its responsibilities, the State may sue to remedy that harm even if it chooses to exercise authority through a public corporation it created and controls. 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 has suffered an injury in fact sufficient to give it standing to challenge the Secretary's plan.
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 ... as the Secretary deems necessary in connection with a ... national emergency." That power has limits. Statutory permission to "modify" does not authorize basic and fundamental changes in Congress's scheme; the term carries a connotation of increment or limitation and must be read to mean to change moderately or in minor fashion. Black's and standard dictionaries confirm this ordinary meaning. Prior HEROES Act invocations were modest and largely procedural. The Secretary's new "modifications" here were not moderate or minor; they created a novel and fundamentally different loan forgiveness program vesting authority to discharge up to $10,000 or $20,000 across an income-limited universe, effectively covering nearly every borrower within that cap.
The Secretary's plan "modified" the cited provisions only in the same sense that a revolution modifies status—it abolished and supplanted them with a new regime. Congress specified limited circumstances for discharge; the Secretary converted that approach into its opposite by creating a new program affecting tens of millions of Americans and hundreds of billions of dollars. It is highly unlikely Congress intended to authorize such sweeping cancellation through a device labeled permission to "modify."
The Secretary argues that "waive" grants broader authority than "modify" alone. Historically, waiver under the HEROES Act was used to nullify particular legal requirements temporarily. Here the Secretary cannot identify any provision he is actually waiving that authorizes wholesale elimination of borrower obligations; there is no specific statutory provision imposing on borrowers an obligation whose waiver would alone achieve blanket principal cancellation. The Department therefore attempts to waive various elements of the discharge provisions and then "modify" to bring provisions in line with the program; but the word "modify" cannot bear that interpretive weight.
The Secretary and dissent further contend the combined "waive or modify" is greater than its parts—that waiver permits elimination and thus combined authority permits reductions up to but not including total waiver. But that is not what occurred: rather than genuinely waiving discrete requirements and effecting modest modifications, the Secretary effectively drafted a new section of the Education Act by waiving provisions and substituting radically new substantive terms. The procedural provision requiring notice of "the terms and conditions to be applied in lieu of such statutory and regulatory provisions" is a reporting obligation and does not authorize wholesale drafting of new substantive statutory provisions at will; any replacement terms must remain within the limits inherent in the power to "modify."
The Secretary's debt cancellation plan is not simply a waiver because it augments and expands existing provisions; it is not a mere "modification" because it constitutes the introduction of a whole new regime; nor can it be some combination that avoids the limits of "modify." However broadly "waive or modify" might be read, it cannot authorize exhaustive rewriting of the statute as occurred here.
The Secretary appeals to congressional purpose—arguing Congress intended substantial discretion to respond to unforeseen emergencies—but the question is who has the authority to make the consequential tradeoffs attendant on mass debt cancellation. Given the history and breadth of the authority asserted and the economic and political significance of the action, the Court applies the major-questions principle: where an agency asserts authority of vast economic and political significance, courts require clear congressional authorization. The Secretary has never before claimed such magnitude under the HEROES Act; prior waivers and modifications were modest. The economic and political significance here is staggering; models estimate costs in the hundreds of billions of dollars and effects on a significant share of the economy. Major-questions precedents instruct caution in concluding Congress meant to confer such authority by such a statute.
The HEROES Act provides no clear congressional authorization for the Secretary's comprehensive debt cancellation program when examined by ordinary statutory interpretation and by the considerations underlying the major-questions doctrine.
We conclude that Missouri has standing, and that the HEROES Act does not authorize the Secretary's debt cancellation program as implemented. The judgment below is reversed and the case remanded for further proceedings consistent with this opinion. It is so ordered.
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. In this case the Court applies ordinary tools of statutory interpretation to conclude the HEROES Act does not authorize the Secretary's plan; the major-questions doctrine reinforces that conclusion but is not necessary to it. The parties have devoted significant attention to the major questions doctrine; there is ongoing debate about its source and status. I take seriously the charge that the doctrine is inconsistent with textualism, and I grant that some articulations—most notably that the doctrine is a substantive canon—should give a textualist pause. Yet I understand the doctrine differently: as an interpretive principle that emphasizes the importance of context when a court interprets a delegation to an administrative agency. Seen that way, 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. Some substantive canons play modest tie-breaking roles; others are strong-form canons that counsel courts to strain statutory text to advance particular values, effectively imposing a "clarity tax" on Congress. Such canons are in tension with textualism because they instruct courts to adopt something other than a statute's most natural meaning. The major-questions doctrine has been characterized by some as such a strong-form substantive canon designed to enforce Article I's Vesting Clause—a clear-statement requirement that discourages delegations. I do not read our major questions cases that way. Although many of those decisions express an expectation of clear authorization, none requires an unequivocal congressional declaration as our clear-statement cases do, and none purports to depart from the best interpretation of the text.
B
Instead, the major questions doctrine functions to situate text in context, something textualists do as a matter of course. The meaning of a word depends on the circumstances in which it is used. Context includes background legal conventions, industry practice, prior agency conduct, and common sense. The doctrine reflects an expectation that Congress normally intends to make major policy decisions itself, leaving "interstitial" matters to agencies. When an agency asserts highly consequential power, a court should greet that claim with skepticism and examine the text and context together. That skepticism does not authorize courts to choose inferior but tenable alternatives to suppress agency authority; rather, context may show the agency's claim is plainly authorized or plainly not. The doctrine thus helps courts determine whether agency assertions exceed what Congress could reasonably be understood to have granted.
II
The doctrine grows out of commonsense principles of communication: a grant of authority ordinarily includes limits supplied by context, and we expect clearer authorization for decisions of great magnitude. When a statute uses broad words, surrounding circumstances—statutory context, history, agency expertise, and political consequences—help determine whether Congress actually delegated the claimed power. Cases like Brown & Williamson, King v. Burwell, and others illustrate how context has been decisive in rejecting agency claims that, while perhaps colorable from a narrow text-based view, cannot be reconciled with the statute's broader context.
III
The major questions doctrine has an important role when courts review agency action of vast economic and political significance. It does not substitute for ordinary textual analysis but supplements it by focusing attention on context. In this case, the Secretary's loan cancellation program is such a major assertion of authority, and enough indicators from prior major-questions cases are present to conclude that Congress would have intended to make such tradeoffs itself. The doctrine thus reinforces the Court's statutory conclusion that the HEROES Act does not authorize the program. But the doctrine here is not a free-standing textual override; it is an interpretive tool that gives Congress's words their best reading.
Justice KAGAN, with whom Justice SOTOMAYOR and Justice JACKSON join, dissenting.
In every respect, the Court today exceeds its proper, limited role. Congress enacted the HEROES Act to authorize the Secretary of Education to provide relief to student-loan borrowers when a national emergency struck. That authority was bounded—he could do only what was "necessary" to alleviate the emergency's impact on affected borrowers' ability to repay their loans—but within that limitation Congress gave discretion to the Secretary to "waive or modify any statutory or regulatory provision" applying to federal student-loan programs and to replace old provisions with new "terms and conditions." The Secretary acted pursuant to that delegation in implementing widespread loan relief in response to the COVID pandemic. The Court forbids him from doing so.
The Court first errs by deciding this case at all. Article III requires a plaintiff to have standing—a personal stake in the litigation in the form of a concrete and particularized injury. The plaintiffs here are six States that lack a straightforward, particularized injury from reductions in individual borrowers' federal student-loan debt. Missouri's claim that it is injured via MOHELA is dependent on the rights and finances of a separate public corporation. MOHELA is a legally and financially independent entity that can sue and be sued in its own name; it did not bring this lawsuit. Under settled doctrine a State does not have standing as parens patriae to sue the Federal Government on behalf of its citizens, and a State cannot rest its standing on the legal rights of another entity. Because MOHELA could have sued but chose not to, Missouri lacks the particularized injury required to invoke federal jurisdiction.
The majority's invocation of Arkansas v. Texas and Lebron does not help. Arkansas involved a state instrumentality that lacked the kind of separateness present here; when a State entity is in substance the State's property or lacks independent capacity to sue, the State may sue to protect that property. MOHELA, by contrast, has separate corporate status, distinct assets, and a separate ability to litigate. The Missouri Supreme Court and Missouri statutes treat such instrumentalities as separate entities, and Missouri cannot make the required showing that MOHELA's losses will be passed through to the State's treasury. Allowing Missouri to piggyback on MOHELA's injury would eviscerate standing limits and turn courts into fora for airing political grievances.
On the merits, the HEROES Act's text and structure give the Secretary the authority he used. The statute permits the Secretary to act "as [he] deems necessary" in connection with a national emergency, to "waive or modify any statutory or regulatory provision," and to specify "the terms and conditions to be applied in lieu of such" provisions. The statute's triggers are demanding: the President must declare a national emergency, the Secretary's relief must be confined to "affected individuals," and he may act only as necessary to ensure they are not placed in a worse position financially. But when those conditions are met, Congress plainly authorized the Secretary to alter or replace statutory and regulatory provisions governing repayment and discharge. The words "any," "waive," and "modify," read together and in context, support a broad delegation that includes the power to substitute new terms when necessary to assist affected borrowers.
The majority's contrary reading hinges on treating the verbs in isolation and on the major-questions doctrine that this Court has developed to impose a heightened-specificity requirement when agencies claim authority of vast significance. That approach is unwarranted here. The HEROES Act was designed to provide flexible, durable authority to respond to emergencies—Congress explicitly sought to enable waivers for issues "not yet contemplated." Delegations like this one serve governance needs: agencies can adapt rules and policies to changing circumstances. The Court's imposition of a judicially derived bar to the exercise of such delegated authority substitutes judicial judgment for that of the political branches and undermines democratic accountability.
The Court thus departs from judicial restraint twice over: first by creating standing where none exists, and second by cutting down a congressional delegation intended to permit emergency relief. This Court now decides a major policy question—whether millions of borrowers will receive debt relief—rather than allowing the democratically accountable branches to resolve it. I respectfully dissent.