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Biden Sued for Student Debt Cancellation Attempt

Biden Sued for Student Debt Cancellation Attempt
President Joe Biden | Image by REUTERS

President Joe Biden quietly announced changes to his student loan debt forgiveness program on the same day that six state attorneys general sued his administration, claiming that the program was unlawful.

Attorneys general from Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina filed suit in federal court against President Biden and his education secretary Miguel Cardona on September 29.

“No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed,” the plaintiffs wrote in their court filing. “It is the epitome of unlawful and arbitrary agency action, and it should be set aside.”

The Biden administration has argued that it has the authority to forgive nearly $400 billion in student loans under the HEROES Act, passed in 2003.

The legislation empowers the U.S. education secretary to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … in connection with a war or other military operation or national emergency.”

Though the president recently declared the COVID-19 pandemic over, his administration still relies on it to satisfy the “national emergency” requirement for invoking the HEROES Act for this purpose.

The loan forgiveness amount could be up to $10,000 or $20,000 if the borrower “consolidated his or her debt into the federal Direct Loan program.”

“It is inconceivable, when it passed the HEROES Act, that Congress thought it was authorizing anything like the Administration’s across-the-board debt cancellation,” the plaintiffs argued.

This argument being put forth by the six attorneys general aligns with what Democrat Speaker of the House Nancy Pelosi said in July, a month before Biden announced his plan to cancel student loan debt.

“People think that the president of the United States has the power for debt forgiveness,” Pelosi said at the time. “He does not. He can postpone, he can delay, but he does not have that power. That has to be an act of Congress.”

However, Biden is pressing forward, albeit with changes to his initial plan. On the day the lawsuit against him was filed, he announced that borrowers who have federal student loans owned by private entities and not by the U.S. Department of Education would no longer be eligible for the program.

Previously the administration had said borrowers who had student loans owned by private entities, such as those made under the Federal Perkins Loan program and the former Federal Family Education Loan (FFEL) program, would qualify for relief.

The reversal is likely to impact about 4 million borrowers, roughly 10% of the estimated 43 million the program intended to target. However, if borrowers with these now ineligible loans had acted before this announcement, they would still be eligible for debt cancellation.

“The Biden administration’s executive action to cancel student loan debt was not only unconstitutional, it will unfairly burden working-class families and those who chose not to take out loans or have paid them off with even more economic woes,” Kansas Attorney General Derek Schmitt said in a statement.

In summary, Schmitt said, “The Biden administration’s unlawful edict will only worsen inflation at a time when many Americans are struggling to get by.”

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2 Comments

  1. A K

    Student debt industry is hopelessly broken. It drowns people. There are so many that took out a loan, have paid faithfully for decades, and now owe MORE than they originally borrowed. It’s criminal.

    Forgiveness is only a minor, temporary remedy. We need an overhaul of the student debt industry with stricter restrictions and caps on interest rates.

    Reply
  2. Pap

    He has no business paying for people’s college. If they didn’t charge such high taxes, the students would be more able to pay their loans. The government also shouldn’t be giving money to Planned Parenthood. If they lowered taxes, then “We the people” could decide how the money is spent. Donate as we see fit.

    Reply

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