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258 views • September 27, 2022

Biden Administration's Student Debt Relief Order Is Illegal: Lawsuits

NTD News
NTD News
President Joe Biden's administration has been hit with the first lawsuits against a recently unveiled order that would—unless blocked—cancel thousands of dollars in debt for millions of Americans. Biden, a Democrat, and Education Secretary Miguel Cardona, a Biden appointee, announced the order in August, revealing that people with student debt could receive up to $20,000 in relief if they meet certain conditions. Administration officials say over 40 million people are likely eligible for the relief. The problem, according to the suits, is that the order is not legal. "Nothing about loan cancellation is lawful or appropriate. In an end-run around Congress, the administration threatens to enact a profound and transformational policy that will have untold economic impacts. The administration’s lawless action should be stopped immediately," one suit, filed in federal court in Indiana, states. The "plain language and context" of the law that the administration cited does not give Cardona the authority to discharge or forgive student loan debt on a blanket basis, the other suit, filed in U.S. court in Oregon, says. The Department of Education referred a request for comment to the White House, which did not immediately respond to a query. "This is a promise that the president made on the campaign trail and this is an opportunity that the president to give Americans, American families a little breathing room," White House press secretary Karine Jean-Pierre later told reporters in Washington when asked about the Indiana suit. She claimed that opponents of the plan "are trying to stop it because they know it will provide much-needed relief for American families," and added that people who don't want the cancellations can opt out. Legal Basis The U.S. government holds approximately $1.6 trillion in student debt, for more than 45 million people. The debt is held in part by two systems—the Direct Loan Program and the Federal Family Education Loan Program. Under Cardona's order, $10,000 to $20,000 in debt would be canceled for individuals who earn less than $125,000 per year or households that earn less than $250,000 per year. The administration cited the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which says that the Department of Education can “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” when “necessary in connection with a war or other military operation or national emergency.” Only people who are serving on active duty during a war or national emergency, reside in an area declared a disaster area, or who have suffered "direct economic hardship" as a direct result of a war or national emergency are eligible for the waiver or modification. Lisa Brown, a Department of Education lawyer, said that the authority can be used because of the COVID-19 pandemic. "The Secretary could waive or modify statutory and regulatory provisions to effectuate a certain amount of cancellation for borrowers who have been financially harmed because of the COVID-19 pandemic," she said in a legal memorandum (pdf). Christopher Schroeder, an assistant attorney general, also said the HEROES Act enables Cardona to execute his authority. "We ... conclude that reducing or canceling the principal balances of student loans, including for a broad class of borrowers who the Secretary determines suffered financial harm because of COVID-19, could be a permissible response to the COVID-19 pandemic," Schroeder wrote in a memo (pdf). The cases challenge that view. "The bottom line is this—the HEROES Act just doesn't give the authority for the administration to forgive, on blanket basis, all of these loans," Steve Simpson, a senior attorney for the Pacific Legal Foundation (PLF), told The Epoch Times. Plaintiffs Simpson filed the lawsuit in Indiana on behalf of Frank Garrison, a PLF public interest attorney. Garrison has paid off some, but not all, of his student debt. Garrison would be left worse off due to having to pay taxes on the amount forgiven under the p
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