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Group Sues Biden Admin Over ‘Flagrantly Illegal’ Student Loan Relief Program – Market Subset News


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A lawsuit has been filed against the administration of President Joe Biden for his plan to cancel student debt.

The lawsuit was filed by the Pacific Legal Foundation on Tuesday for its plan to cancel as much as $10,000 in debt for millions of student borrowers.


“Congress did not authorize the executive branch to unilaterally cancel student debt,” Pacific Legal Foundation attorney Caleb Kruckenberg said. “It’s flagrantly illegal for the executive branch to create a $500 billion program by press release, and without statutory authority or even the basic notice and comment procedure for new regulations.”

“In August 2022, President Biden announced his plan to cancel up to $20,000 in student loan debt per person for more than 40 million Americans. The Department of Education’s justification relies on an inapplicable, 20-year-old law: The HEROES Act, which was intended as aid to veterans and their families, allows the government to modify student loans during times of war or national emergency,” the press release said.

“Whatever the motives of the president for transferring massive amounts of student debt to taxpayers in a rushed, haphazard manner, it certainly seems like an election-year ploy. That is one of the predictable effects of the president usurping Congress’s power to make law. Not since President Trump imposed a nationwide eviction moratorium before the 2020 elections have a president abused his power so profoundly,” it said.

“Cancelling student debt is unjust to those who have paid their loans or never took any. It will only lead to more calls for government intervention in education at taxpayers’ expense,” senior attorney at Pacific Legal Foundation Steve Simpson said. “Loan cancellation will make Americans more divided, as those who paid their loans—or never went to college—will have good reason to think that we no longer have a government of, by, and for the people.”

In the meantime, the student-loan forgiveness application site officially went live on Monday.

“After conducting beta testing over the weekend, President Joe Biden — alongside Education Secretary Miguel Cardona — announced that the application website is officially live, and borrowers can apply for up to $20,000 in debt relief that will start being processed by the Education Department. During his remarks, Biden noted that over 8 million borrowers applied over the weekend without a glitch or any difficulty,” Business Insider reported.

“It means more than 8 million Americans are starting this week on their way to receiving life-changing relief,” Biden said. “Millions more are going to have the opportunity to do it as well. As millions of people fill out the application, we’re going to make sure the system continues to work as smoothly as possible.”

The Insider report added: “Borrowers who submitted their applications during the beta testing period do not need to resubmit — their forms will now begin getting processed. As Biden noted, it takes just five minutes to apply — borrowers just need to enter basic information like their names, email addresses, and Social Security numbers. The department recommends applying before mid-November to ensure relief hits borrowers’ accounts before payments resume in January 2023.”

Borrowers are waiting for a decision from a judge who heard arguments from six Republican-led states seeking to block the plan, arguing that the student loan debt relief plan will harm their states’ tax revenues.


Biden spoke about the pending lawsuits on Monday, saying he does not believe the Republican-led groups have any standing.

“I will never apologize for helping working Americans and middle-class people as they recover from the pandemic,” Biden said. “Especially not the same Republicans who voted for a $2 trillion tax cut in the last administration.”

Scott Buchanan, executive director of the Student Loan Servicing Alliance, told Business Insider that loan companies can’t predict when borrowers may get relief because they are not involved in the implementation process of the plan under the Biden administration.

“We’re really waiting on more firm information about dates and timelines which we don’t really have yet,” Buchanan said.

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