Main Highlights:
- Student debt relief is being defended legally by the Biden administration.
- The case against debt forgiveness
- What a legal action might entail for borrowers
Many conservatives are as opposed to President Biden’s student debt relief plan as many borrowers are. The nonpartisan Congressional Budget Office recently estimated that it will cost roughly $400 billion.
“The president is not a monarch. He is not the Emperor. And if he does something unconstitutional, you can bet I’ll hold him accountable “In an interview with NPR, Arizona Attorney General Mark Brnovich stated. Brnovich followed through on his promise on Thursday, filing a lawsuit to halt Biden’s plan.
“I can assure you that my Republican colleagues and I will fight to the bitter end against this illegal, abusive use of the executive pen,” North Carolina Rep. Virginia Foxx said recently.
In short, the legal challenge to Biden’s debt relief plan has become a collaborative effort. Brnovich’s is the third lawsuit filed this week. Other conservative politicians, interest groups, and attorneys are expected to file similar lawsuits in the near future.
What are their chances of success?
Depending on who you ask, the answer will vary.
Student debt relief is being defended legally by the Biden administration.
The Higher Education Relief Opportunities For Students Act, also known as the HEROES Act, was passed by President George W. Bush in the wake of the Sept. 11, 2001 attacks while American troops were engaged in combat in Iraq and Afghanistan. The United States Justice Department cited this law in a memo supporting Biden’s proposal.
According to the Justice Department’s memo, the act granted the U.S. secretary of education extraordinary powers, including the ability “to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.”
Think back twenty years to the COVID-19 pandemic, a very different kind of national emergency.
Early in the pandemic, the Trump administration used this same HEROES Act authority to halt payments and interest accrual on federal student loans, assisting many borrowers who would have struggled to keep up due to COVID’s devastating impact on the economy.
President Biden announced he would go even further, cancelling up to $20,000 in student loan debt for borrowers who meet the required income threshold and received a Pell Grant to attend college, in addition to extending the payment freeze through December and citing the same authority.
According to the Biden administration, if Republicans believe this debt relief is an abuse of power, why did they not oppose President Trump’s use of the same authority in 2020?
“This was not challenged in court. A court has not ruled that it is improper “According to Bharat Ramamurti, deputy director of the National Economic Council, the Trump-initiated payment pause following Biden’s announcement. “This is the same statutory provision that the previous administration used, that we used and that we are now using for this action.”
The case against debt forgiveness
Opponents of Biden’s debt relief plan have stated unequivocally that they believe it is an illegal abuse of power.
They argue that Congress controls government spending and that the president cannot simply erase hundreds of billions of dollars in student loan debt without first consulting lawmakers.
“If Joe Biden or the Biden administration implement an unconstitutional policy, we will sue him,” Arizona’s Mark Brnovich told NPR before doing so.
One word sums up the issue for Brnovich and anyone else hoping to thwart Biden’s plan: standing legally.
According to Abby Shafroth, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, “the courts can only get involved… when someone who has been harmed in a concrete way by that action files a lawsuit.”
Whom could Biden’s plan, which could assist up to 40 million borrowers, actually harm?
Standing is actually the biggest challenge, Brnovich acknowledged. It’s not a wall, just a hurdle.
Additionally, banks and loan servicers may be able to file lawsuits.
Thursday’s rejection appeared to put an end to one legal tactic, but it actually opened a new one. Six states filed a lawsuit against the Biden administration on behalf of a few state-based loan servicers and investment companies that look after FFEL loans, or old, privately held federal loans.
It’s unclear at this time whether the department’s Thursday policy change, which restricts the number of FFEL borrowers who are eligible for debt relief, will undermine these states’ claims and lessen the likelihood that other organisations that oversee and profit from FFEL loans will legally object to relief.
What a legal action might entail for borrowers
Brnovich and other defendants assert that if a lawsuit is allowed to move forward, their top priority would be to request an injunction. That entails requesting a judicial restraining order to prevent the Biden administration from cancelling any student loan debt.
What is unclear is whether an injunction could be issued before some debtors have their obligations cancelled, confusing the remaining debtors who will then have to wait for the lawsuit to proceed.
Brnovich said to NPR, “We don’t want to create a situation where, you know, a bunch of people are in limbo on this.” “Therefore, I believe it is our collective responsibility to file a lawsuit as soon as possible. In this manner, there is no room for doubt. Naturally, getting a temporary restraining order to stop the president would be necessary as well.”
Plaintiff Frank Garrison asked the court in a filing on Tuesday to stop the department from cancelling any loans under the new Biden plan, but the judge quickly rejected this request.
At this point, the following are certain:
Conservative legal organisations are making notes in order to strengthen the next lawsuit. That legal avenue might be closed because the department’s decision to include an opt-out undermined Garrison’s argument.
We’ll soon see how the court reacts to the department’s abrupt change to its FFEL rules and whether it hurts the six-state lawsuit against debt relief.
The Education Department, on the other hand, has made it clear that it is open to making changes immediately if doing so will keep the majority of borrowers covered by the president’s debt relief plan.
This legal battle might reach the U.S. Supreme Court if Brnovich, Ortiz, or other debt relief opponents are successful in bringing a suit – or suits – to federal court.