As the FAFSA Fiasco unfolds, along with changes in federal student loan servicing and forgiveness, stakeholders in federal policy eagerly await another Supreme Court decision. Several month ago, the Supreme Court heard two cases that challenge the Chevron doctrine. It is anticipated that the Supreme Court will vote to discard Chevron, putting several federal policies at risk.
Why is this significant for higher education, particularly federal student loan programs? If the Supreme Court discards the Chevron doctrine, it could pave the way for challenges against federal student aid policies.
What is the Chevron doctrine?
The Chevron doctrine, established in 1984 through the case Chevron v. Natural Resources Defense Council, allows courts to defer to a federal agency’s interpretation of an ambiguous statute if that interpretation is reasonable. Chevron "deference" is the respectful yielding to the judgment of federal agencies. This principle has been pivotal in shaping regulations and federal policies across various government agencies.
For instance, the federal student aid programs under the Higher Education Act (HEA) of 1965, as amended, are administered by the U.S. Department of Education. This department has been instrumental in formulating federal regulations and policies that enable millions of students to receive federal funds for college education.
The rationale behind the Chevron doctrine is that, while Congress creates laws, its members are not experts in every field managed by federal agencies. Although congressional members and their staffers consult with experts and conduct research to draft legislation, they may lack the specialized knowledge necessary for implementation. Consequently, Congress has historically depended on federal agencies, staffed by subject matter experts, to execute the laws it enacts.
Chevron deference involves a two-step process for judicial review. First, the court determines whether Congress has directly addressed the specific issue in question. If the statute is ambiguous, the court then defers to the reasonable interpretation of the relevant federal agency.
Supreme Court Cases Challenging Chevron Deference
The two cases argued before the Supreme Court challenging the Chevron doctrine focus on the same issue. Loper Bright Enterprises vs Raimondo and Relentless, Inc. vs Department of Commerce both contend that the Supreme Court should overturn Chevron vs Natural Resources Defense Council. Their cases specifically question the federal policy which mandates that fisheries must cover the salaries of compliance observers on their boats.
Supreme Court Outlook on Chevron Doctrine
From the hearings, it appears that three Supreme Court Justices—Kavanaugh, Gorsuch, and Thomas—are intent on overturning the Chevron decision. Conversely, Justices Sotomayor, Kagan, and Jackson are committed to preserving it.
Policy experts predict that Chevron may be overturned, but several outcomes are possible. One scenario could see the Supreme Court scaling back the doctrine, re-emphasizing that the traditional tools of interpretation must be exhausted. Another possibility is maintaining the Chevron doctrine, and applying the doctrine to decide if the agency reasonably interpreted the laws presented in each case.
U.S. Department of Education’s Role in Regulations and Policy
Once a federal law is enacted, Congress empowers federal agencies to devise reasonable regulations and policies—the "how-to" details needed for implementation.
When it comes to the U.S. Department of Education, there is a method established to create federal student aid regulation—negotiated rulemaking. The Department works with a group of stakeholders selected to the negotiation committee. The negotiators selected are stakeholders representing groups who would be significantly affected by the proposed rulemaking. Those negotiators work to reach a consensus of proposed rules/regulations which will be published in the Federal Register. If consensus is not reached, it is up to the Department to determine how to proceed.
Regardless of whether consensus is reached, the Department may proceed with the regulatory process by publishing the proposed rules in the Federal Register. These proposed rules will include instructions for public comment. The Department will review the comments and address substantial comments when publishing the Final Rules in the Federal Register. The Department considers the intent of the law when deciding whether to accept or reject regulatory changes based on public comments.
Once the regulations are finalized and published, the Department implements the law and its corresponding regulations. For federal student aid programs, implementation may involve additional steps. While regulations provide more specifics than the original statute, schools, students, and other stakeholders might need further guidance to participate in or benefit from these programs. For instance, students might visit the StudentAid.gov website for instructions on completing a FAFSA or understanding student loan repayment options. Schools involved in federal student aid programs may refer to the Federal Student Aid Handbook, issued each award year, for additional guidance.
Criticisms of the Chevron Doctrine?
Critics of the doctrine have long worried about an agency's power to interpret statutes. Some argue that it can lead to inconsistent policies with each new administration. Others maintain that creating and implementing laws should be the responsibility of Congress, not federal agencies.
What Will Happen if the Chevron Doctrine is Overturned?
Determining the outcome is challenging and hinges on the final Supreme Court decision. Some anticipate that courts could be inundated with cases challenging federal regulations and policies, significantly impacting the day-to-day operations of federal agencies.
Before the Chevron doctrine, Skidmore deference was applied, where courts closely examined agency interpretations, giving weight to their agency expertise but only siding with them if the interpretation was persuasive. Years of evidence suggest that courts have favored government agency interpretations under Chevron. However, if Chevron is overruled, it will become easier to challenge agency interpretations, though the exact implications remain uncertain. While challenging agency decisions might become more straightforward, convincing the courts to side with those challenges is a different matter. This potential shift might also prompt agencies to rely more on statutory text and congressional intent to ensure their decisions withstand judicial scrutiny.