Document ID: ./input/supremecourt_opinions/opinions/22pdf/22-506_nmip.pdf
Page Number: 7

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 restruc-
tured  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  Loans— 
government-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 lend-
ers.  Such benefits include deferment of any repayment un-
til after graduation, loan qualification regardless of credit
history, relatively low fixed interest rates, income-sensitive
repayment plans, and—for undergraduate students with fi-
nancial  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 con-
ditions attached to federal loans, including applicable inter-
est rates, loan fees, repayment plans, and consequences of 
default.  See §§1077, 1080, 1087e, 1087dd.  It also author-
izes the Secretary to cancel or reduce loans, but only in cer-
tain limited circumstances and to a particular extent.  Spe-
cifically, the Secretary can cancel a set amount of loans held