A Lawsuit Was Filed to Stop Biden’s Student Loan Forgiveness

The Biden Administration must know it lacks the right to unilaterally erase half-trillion dollars in student debt. Still, it may have been calculated that no one could establish the necessary harm to initiate a court challenge, and maybe someone else could.

On Tuesday, an Indiana borrower filed a court lawsuit to stop the President’s student debt write-off. He argues that the loan cancellation has injured him and is thus unlawful. Only cases and conflicts are heard in federal courts, and plaintiffs must demonstrate that they have experienced substantial and specific damage.

Individual taxpayers are not hurt immediately by the write-off, even if they eventually incur the expense. The cancellation is unjust to Americans who paid their debts or have yet to attend college and therefore have experienced no tangible harm. Frank Garrison claims he would suffer financial hardship due to federal loan repayment arrangements and Indiana tax law flaws.

Mr. Garrison participates in the federal Public Service Loan Forgiveness program, which restricts his monthly payments to a percentage of his salary and cancels the remaining debt after ten years. The President’s loan forgiveness will result in the instant cancellation of $20,000 in debt. However, because his monthly payments are already capped, this will not cut them.

However, he will have to pay more than $1,000 in state taxes this year on the canceled debt. Because Indiana does not tax Public Service Loan Forgiveness, he will not owe any state taxes in the future. He claims he will not gain an “additional advantage from the cancellation—only a one-time extra penalty.”

He won’t be able to dodge this blow since the Education Department has stated that it will automatically cancel loans for eight million borrowers with income data, notably those on income-based repayment plans. Mr. Garrison’s hurt is also impending since the Department has stated that it intends to begin eliminating debt for debtors in early October.

According to White House legal memos, the 2003 Higher Education Relief Opportunities for Students (Heroes) Act authorizes the Education Secretary to “waive or modify” any statutory or regulatory provision of student aid programs when necessary during wartime, military operations, or national emergencies.

Because Mr. Biden has declared Covid a national emergency, the Administration has stated that it would forgo the responsibility to repay debt. This indicates that any principle does not limit the executive’s ability to eliminate student debt. Mr. Biden might declare climate change a national emergency as an excuse to pay off additional debt.

According to Mr. Garrison’s lawsuit, debt forgiveness also violates the Administrative Procedure Act since the federal government failed to demonstrate its remedy is required to correct the harm caused by the pandemic emergency—possibly because it cannot. In addition, the Department failed to complete a legitimate rule-making process, including notice and comment.

The Administration also maintains that Congress “used the term ‘necessary’ in a more flexible and expansive sense, meaning ‘suitable’ or ‘conducive’ rather than ‘vital’ in the “Heroes Act.” However, as the Supreme Court stated in West Virginia v. EPA, economically and politically important acts require explicit congressional authority. Mr. Biden’s loan cancellation is the most egregious executive usurpation of Congress in recent history. The Pacific Legal Foundation deserves credit for representing Mr. Garrison and the neglected taxpayers