Biden’s executive action to cancel student loan debt challenged with another major lawsuit

It was announced in late August that President Joe Biden, by way of executive action, would make good on a campaign promise and “cancel” a portion of student loan debt held by certain borrowers who met certain eligibility requirements.

That move has been met with a number of lawsuits, including one from the conservative-leaning Job Creators Network Foundation which asserts that Biden’s plan to cancel some student debt is both unconstitutional and unfair, the Daily Wire reported.

The lawsuit accuses the Biden administration of violating the Administrative Procedure Act by skipping past the required notice-and-comment process for new or amended agency rules, and criticized the president’s plan for forcing taxpayers to shoulder the burden of student loan debt instead of the colleges and universities that are mostly responsible for the high costs that necessitate such loans and debts.

Biden plan to cancel student loan debt revealed

On August 24, the White House announced that President Biden had authorized the Education Department to cancel or forgive up to $10,000 in student loan debt — up to $20,000 for those who received Pell Grants — for borrowers with outstanding debt who earned less than $125,000 annually.

The order also extended until next year the pandemic-related moratorium on student loan debt repayments and capped the amount of monthly payments — once such payments eventually resume — at no more than 5 percent of a borrower’s monthly income.

According to the JCNF and two plaintiffs it represents — one whose loan is commercially held and is therefore ineligible for relief, the other who didn’t receive a Pell Grant and is therefore ineligible for the full $20,000 in relief — the plan is unlawful and in violation of the APA and should be vacated and blocked by the federal courts.

Biden plan is “irrational, arbitrary, and unfair”

“The Department of Education has flagrantly violated the APA’s notice-and-comment requirements. Behind closed doors, the Department promulgated a new Debt Forgiveness Program that will affect tens of millions of Americans and cost more than 400 billion dollars,” the 15-page filing said. “Instead of providing notice and seeking comment from the public, the Department hammered out the critical details of the Program in secret and with an eye toward securing debt forgiveness in time for the November election.”

“Along the way, the Department made numerous arbitrary decisions about the Program, including which individuals will receive debt forgiveness, how much of their debt will be forgiven, and which types of debt will qualify for the Program,” the suit continued. “The result of this arbitrariness is predictable: some will benefit handsomely, some will be shortchanged, and others will be left out entirely.”

The JCNF went on to note that the plaintiffs believed their exclusion from eligibility for relief was “irrational, arbitrary, and unfair” and that their “procedural rights” to protect their interests had been violated by the lack of the required notice-and-comment period under the APA.

“Without relief from this Court, Plaintiffs will be forever denied their procedural rights to protect their concrete interests,” the lawsuit argued. “Because the Debt Forgiveness Program was adopted in violation of the APA, the Program must be vacated and set aside and the Department should be enjoined from implementing or enforcing the Program in any manner.”

College and university endowments, not taxpayers, should shoulder the burden

“Our lawsuit intends to block the Biden administration’s student loan bailout, which is an unprecedented executive power grab. The administration’s action does nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments,” JCNF President Elaine Parker said in a statement. “Colleges need to be held accountable for their outrageous tuition prices that fund high executive pay, an army of administrators who provide little-to-no value, and the construction of resort-style amenities. College endowments, not taxpayers, should be responsible for helping students drowning in debt.”

“By shifting the burden to taxpayers, including those who didn’t go to college or paid their student loans back, colleges escape responsibility for their actions creating the student loan crisis,” Parker said. “They are given carte blanche to continue their ridiculous pricing,” she added. “Bailing out this debt only kicks this problem down the road. By blocking this inflationary taxpayer bailout, JCN’s lawsuit can lay the groundwork to actually solve the student debt crisis by holding its college perpetrators accountable.”

Latest News