Republicans consider suing Biden over student loan forgiveness
By Katie Lobosco, CNN
Some Republicans are working on a legal strategy to overturn President Joe Biden’s student loan forgiveness plan, which could potentially stop millions of Americans from receiving up to $20,000 in debt cancellation.
“I’ve been working with some colleagues trying to develop the best legal theory of moving to sue the Biden administration over the student loan forgiveness policy,” Arizona Attorney General Mark Brnovich, a Republican, told CNN Thursday.
“I think any real lawyer knows that there is not a legal basis for doing what they’re doing,” he added, calling the policy “fundamentally unfair.”
Biden announced last week that the Education Department would cancel up to $10,000 of federal student loan debt for individuals who make less than $125,000 a year and married couples or heads of households who make less than $250,000 annually. Those borrowers who also received a Pell grant while enrolled in college are eligible to receive up to $20,000 in forgiveness.
The Biden administration has said that Congress previously granted the executive branch the authority to broadly cancel student loan debt in the event of a national emergency like the Covid-19 pandemic.
But canceling federal student loan debt so broadly is unprecedented and has yet to be tested in court. Biden initially urged Congress to take action to cancel some student debt, rather than wade into a murky legal area himself, but Democrats don’t have the votes to pass legislation doing so.
A conservative advocacy group called The Job Creators Network — founded by Bernie Marcus, a major donor to former President Donald Trump and former Home Depot CEO — is also considering filing a lawsuit.
“Job Creators Network Foundation is still evaluating its legal options as we await the Biden administration’s official action to forgive student debt,” said the group’s CEO, Alfredo Ortiz, in a statement sent to CNN. The foundation is the organization’s education arm.
“We plan to stand up for ordinary Americans and small business owners and block this illegal executive overreach from taking effect,” he added.
What the Biden administration argues
In a Department of Education memo released last week, the Biden administration argued that the Higher Education Relief Opportunities for Students Act passed in 2003, known as the Heroes Act, grants the education secretary the power to cancel student debt to help address the financial harm suffered due to the Covid-19 pandemic.
The Heroes Act, which was passed in the wake of the September 11 terrorist attacks, “provides the Secretary broad authority to grant relief from student loan requirements during specific periods,” including a war, other military operation or national emergency, according to the memo.
The Justice Department also released a 25-page memo that stated that the education secretary “may reasonably conclude that class-wide debt relief in these circumstances is appropriate.”
Still, those legal arguments may not stop critics from pursuing a lawsuit.
Rep. Byron Donalds, a Republican from Florida, is calling on GOP leadership to explore a legal challenge over Biden’s plan, according to Harrison Fields, a senior adviser to the congressman. Spokespeople for House Minority Leader Kevin McCarthy and Senate Minority Leader Mitch McConnell did not respond to CNN’s request for comment.
“Let’s be clear about what they would be trying to do here: The same folks who voted for a $2 trillion tax giveaway for the rich and had hundreds of thousands of dollars of their own small business loan debt forgiven would be trying to keep millions of working middle-class Americans in mountains of debt,” said White House spokesperson Abdullah Hasan in an email sent to CNN.
Uncertainty for borrowers
While Biden announced the forgiveness plan last week, legal experts are also expecting the administration to publish an official version of the notice in what’s called the Federal Register. That notice could provide further legal justification for the President’s debt cancellation plan.
“I don’t think a lawsuit that claws back student debt forgiveness is something borrowers need to be overly worried about,” said Abby Shafroth, staff attorney at the nonprofit National Consumer Law Center.
She believes a legal challenge would be unsuccessful for two reasons: The merits of the legal statutory authority are strong, and it’s unclear who would have standing to bring a case and want to do so.
“It’s a narrow bucket. It doesn’t seem clear any person or entity has standing,” Shafroth said.
Standing to bring a case is a procedural threshold requiring that an injury had been inflicted on a plaintiff justifying the lawsuit. Typically anyone who would lose money as a direct result of the cancellation could have standing. It’s unlikely to be a borrower who didn’t qualify for forgiveness, but could potentially be a student loan servicer or collection agency, legal experts have previously told CNN.
“It’s no secret that’s the big question,” said Brnovich when asked who could have standing to sue.
If the standing hurdle is cleared, the case would be heard by a district court first — which may or may not issue a preliminary injunction to prevent the cancellation from occurring before a final ruling is issued on the merits of the hypothetical case.
Several recent Supreme Court decisions have touched on executive power, limiting the federal government’s authority to implement new rules. While the Supreme Court takes up a small number of cases each year, lower courts may look at what the justices have said in those cases when assessing the Department of Education’s authority.
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.