Small Business Group Files Suit Over Biden Student Loan Plan
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 Job Creators Network Foundation filed the suit Monday claiming that the Biden administration failed to solicit public feedback on its program. It’s one of a handful of suits that have been filed by conservative business groups, attorneys and Republican lawmakers in recent weeks as the Biden administration tries to push forward with its plan to cancel billions in debt before November’s midterm elections.
Elaine Parker, president of Job Creators Network Foundation, slammed the program as executive overreach and complained that it does nothing to address the root cause of rising debt: the “outrageous increase in college tuition that outpaces inflation every single year.”
“This bailout is going to affect everyone in this country because of the mass size of the program,” she said. “And everyone should have the opportunity to provide their views to the government.” She added: “These universities need to be held accountable for this student debt crisis.”
The Job Creators Network has previously sued to try to to block the Biden administration’s COVID vaccine mandate on businesses. It also sued Major League Baseball in 2001 for moving the All-Star game out of Atlanta over objections to changes to Georgia’s voting laws. It cited local losses as the basis for its suit but it was eventually dropped.
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This new lawsuit is part of an increasing number of legal challenges to President Joe Biden’s proposal in August to cancel $20,000 of debt for some borrowers.
Six Republican-led States filed suit against the Biden Administration late last month accusing them of going beyond their executive powers. The Pacific Legal Foundation from Sacramento, California filed suit in Indiana federal court, accusing the Biden administration of overstepping its executive powers. They called the plan an illegal overreach and argued that it would raise the state’s tax burdens on some Americans who are able to forgive their debt.
Meanwhile, a federal judge in Wisconsin last week dismissed a lawsuit from a local taxpayers group, the Brown County Taxpayers Association, that sought to block the program, ruling that the group didn’t have standing to bring the lawsuit. The group had argued that Biden’s order unlawfully circumvented Congress’ power over spending and said the plan was discriminatory because it sought to give particular help to borrowers of color.
This latest suit, which was filed against the U.S. Education Department (and its secretary Miguel Cardona) in the District Court for the Northern District of Texas, raises questions about how the plan was created. It alleges the Biden administration violated the Administrative Procedure Act’s notice-and-comment procedures. It also challenges the administration’s legal justification for the program.
Two plaintiffs are included in the suit: One who is not eligible for debt forgiveness due to the plan exclusions commercially-held loans not in default and the other who was not granted a Pell grant but has less rights under the plan.
Learn More We answer your questions about student loans forgiveness
“Behind closed doors, the Department promulgated a new Debt Forgiveness Program that will affect tens of millions of Americans and cost hundreds of billions of dollars,” the suit reads. “Instead of providing notice and seeking comment from the public, the Department hammered out the critical details of the Program in secret and with an eye toward securing debt forgiveness in time for the November election.”
It also alleges 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 which types of debt will qualify for the Program.”
“The result of this arbitrariness is predictable: some will benefit handsomely, some will be shortchanged, and others will be left out entirely,” it reads.
Individuals and households earning less than $250,000 a year will be eligible for the Biden debt forgiveness program, which cancels $10,000 of student loans. Pell grantees who are more financially needy will receive $10,000 additional.
As legal justification, the Biden administration relied on an act that was passed following the September 11th attacks. 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. It cited as an emergency the COVID-19 pandemic.
The Congressional Budget Office projects that the program will result in taxpayers spending $400 billion each year over the next three decade.
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