WASHINGTON (AP) — A small business advocacy group has filed a new lawsuit seeking to block the Biden administration’s efforts to forgive student loan debt for tens of millions of Americans — the latest legal challenge to the program.
The lawsuit, filed Monday by the Job Creators Network Foundation, argues that the Biden administration violated federal procedures by failing to seek public input on the program. It’s one of a series of lawsuits filed by conservative business groups, lawyers and Republican lawmakers in recent weeks as the Biden administration tries to push ahead with its plan to cancel billions in debt ahead of November’s midterm elections.
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Elaine Parker, president of the Job Creators Network Foundation, criticized the program as executive overreach and complained that it does nothing to address the root cause of rising debt: “the wild rise in college tuition that outpaces inflation every year.” “.
“This bailout will affect everyone in this country because of the massive size of the program,” she said. “And everyone should have the opportunity to give the government their views.” She added: “These universities must be held accountable for this student debt crisis.”
The Job Creators Network Foundation has previously gone to court to try to block the Biden administration’s mandate for a COVID-19 vaccine for businesses. She also sued Major League Baseball in 2001 for moving the All-Star Game from Atlanta over objections to changes in Georgia’s voting laws. That lawsuit, which cited losses to local businesses, was later dropped.
The new lawsuit is one of a growing number of legal challenges trying to stop a proposal presented by President Joe Biden in late August to cancel up to $20,000 in debt for certain borrowers.
Six Republican-led states filed suit late last month, accusing the Biden administration of overstepping its executive powers, as did the Pacific Legal Foundation, a legal advocacy group in Sacramento, California. Their lawsuit, filed in federal court in Indiana, calls the plan an illegal overreach that would increase the state tax burden on some Americans who receive debt forgiveness.
Meanwhile, a federal judge in Wisconsin last week dismissed a lawsuit by a local taxpayer group, the Brown County Taxpayers Association, seeking to block the program, ruling that the group did not have standing to file the lawsuit. The group had argued that Biden’s order illegally bypassed Congress’ power over spending and said the plan was discriminatory because it sought to give special help to black borrowers.
The latest lawsuit, filed in the US District Court for the Northern District of Texas against the US Department of Education and its secretary, Miguel Cardona, challenges how the plan was developed. It alleges that the Biden administration violated the notice and comment procedures of the Administrative Procedure Act. It also challenges the administration’s legal justification for the program.
The lawsuit involves two plaintiffs: one who does not qualify for debt forgiveness because the plan excludes commercially held loans that are not delinquent, and one who did not receive a Pell grant and is therefore eligible for less debt forgiveness under plan.
“Behind closed doors, the Department announced a new debt forgiveness program that will affect tens of millions of Americans and cost hundreds of billions of dollars,” the lawsuit states. “Instead of issuing notice and seeking public comment, the Department disclosed critical details of the Program in secret and with an eye toward securing debt forgiveness in time for the November election.”
It also alleges that the department “made numerous arbitrary decisions about the Program, including which individuals will receive debt forgiveness, how much of their debt will be forgiven, and what types of debt will qualify for the Program.”
“The result of this arbitrariness is predictable: some will benefit greatly, some will lose, and others will be completely left out,” it said.
The case was assigned to U.S. District Judge Reed O’Connor, who mostly ruled in 2018 that the Affordable Care Act was unconstitutional. The Supreme Court reversed that decision last year. O’Connor, an appointee of former President George W. Bush, has also ruled against other policies pursued by Democratic administrations. Last month, he ruled that an ACA provision requiring coverage of an HIV prevention drug violated a Texas employer’s religious beliefs.
Civil suits filed in federal court in Fort Worth have a 90% chance of going before O’Connor or Judge Mark Pittman, an appointee of former President Donald Trump, according to a 2020 court order.
White House spokesman Abdullah Hasan responded with a statement defending the loan forgiveness program.
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“While opponents of our plan are pandering to special interests and trying their best to keep millions of middle-class Americans in debt, the President and his administration are fighting to legally give middle-class families some wiggle room for breathing while recovering from the pandemic. and prepare to resume loan payments in January,” he said in a statement.
The Biden debt forgiveness program will cancel $10,000 in student loan debt for individuals earning less than $125,000 a year or families earning less than $250,000. Pell grant recipients, who typically demonstrate more financial need, will qualify for an additional $10,000.
The Biden administration used an act passed after the September 11, 2001, terrorist attacks as legal justification for the program. The law gives the administration “sweeping authority” to reduce or eliminate student debt during times of national emergency, the Justice Department said in an August legal opinion. The administration cited the COVID-19 pandemic as its emergency.
The Congressional Budget Office estimates the program will cost taxpayers $400 billion over the next three decades.
Associated Press writers Seung Min Kim and Mark Sherman contributed to this report.
