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Based on the “natural breadth of the passive voice” used in Section 523(a)(2)(A), the Supreme Court held yesterday in a unanimous opinion by Justice Amy Coney Barrett that a partner who herself was innocent of fraud is nonetheless saddled with a nondischargeable debt resulting from the fraud of her partner. The opinion is a reaffirmation of the Court’s holding in Strang v. Bradner, 114 U.S. 555 (1885). In a concurring opinion, Justices Sonia Sotomayor and Ketanji Brown Jackson endeavored to limit the scope of the holding by saying that they understood the outcome to be based on the existence of a partnership under state law. Read the full column.

A central piece of President Joe Biden’s student-debt reform package could cost as much as $361 billion over the next decade, according to a new estimate from the University of Pennsylvania’s Wharton School, Bloomberg News reported. The changes to income-driven repayment, which the Department of Education formally proposed earlier this month, would cut monthly bills for undergraduate borrowers in half and fast-track eventual forgiveness of the loans. Student loan experts have argued the reforms could prove more significant than Biden’s plan to forgive up to $20,000 in debt per person — and with one-time forgiveness hamstrung by the courts, the new IDR scheme may become the main pillar of the administration’s attempt to tackle Americans’ $1.6 trillion federal student-debt load. Relief, though, comes at a cost: The Department of Education projected a net federal budget impact of $137.9 billion through 2032, while the Wharton estimate of $333 billion to $361 billion is more than double that number. That’s because the government’s calculations assume that IDR enrollment would remain constant at around a third of total loan volume, while the Penn Wharton Budget Model projects the new IDR plan would encapsulate as much as 75% of eligible loans as more borrowers sign up for better benefits.