Biden’s Student Loan Forgiveness Could Be Delayed by Lawsuits

The Biden administration is facing at least four major lawsuits brought by conservative factions unhappy with his student loan forgiveness plan.

On August 24, President Joe Biden announced up to $20,000 in debt relief for federal borrowers making under $125,000 a year. While some members of the Democratic Party wanted the amount to be higher, most supported the policy as an important first step toward finally addressing the $1.7 trillion student debt crisis.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

The White House’s argument that it has the authority to enact this unprecedented relief plan is based on the HEROES Act of 2003. This act gives the Secretary of Education the power to modify or waive student loan balances due to a national emergency (like COVID-19).

However, the groups behind the lawsuits in question disagree, saying the policy overreaches the authority conferred by the HEROES Act, hurts states' revenues, and unconstitutionally advances racial equity.

While the timeline for debt relief could be in jeopardy if the lawsuits are allowed to advance in court, an administration official said, "we're charging full speed ahead in getting relief to the borrowers who need it most."

"We've got a dedicated team at the Department of Education working closely with a team here at the White House to get the program up and running," the official continued. "The sign-up period for debt relief will open up this month. It'll be a short, simple application. We've also started communicating directly with borrowers on what to expect in the coming weeks. We'll have more to share in the coming days."

Four Lawsuits
On September 27, the conservative nonprofit Pacific Legal Foundation brought the first major lawsuit against the debt relief plan. The plaintiff, a student loan borrower named Frank Garrison, who is also a public interest attorney who is eligible for the Public Service Loan Forgiveness (PSLF) program, argues that automatic debt relief will result in him incurring a tax bill he would not have received otherwise — The White House quickly countered that argument, however, by pointing out that everyone has the ability for whatever reason to opt out of the debt relief should they so choose. The group then said it would amend its complaint in order to continue to challenge the plan.

Next, on September 29, another lawsuit was filed by six Republican-led states arguing that the debt cancellation would hurt the states' revenues and saying the HEROES Act does not give the administration the authority to carry out the policy.

Then, on September 30, Mark Brnovich, Attorney General of Arizona, filed a lawsuit arguing that the student loan forgiveness will harm the state by cutting tax revenues, which will make it harder to recruit lawyers.

Most recently, on October 4, the conservative law firm Wisconsin Institute for Law and Liberty (WILL) filed a federal lawsuit arguing that the debt relief plan has an "improper racial motive" and violates the Constitutional rights of equal protection by seeking to help Black borrowers and advance racial equity. WILL also said the plan violates the separation of powers inherent in the Constitution because it does not obtain Congressional approval for the forgiveness.

While a federal judge struck down WILL’s argument and declined to grant a pause on debt-relief, the judge said a future administration could recollect the forgiven debts, should a court find that the President does not have the authority to cancel student debt broadly.