Two conservative organizations have filed a lawsuit in federal court to prevent the Biden administration’s proposal to forgive $39 billion in student debts for more than 800,000 students.
To protect the rights of the Mackinac Center for Public Policy and the Cato Institute, the New Civil Liberties Alliance has filed suit in Michigan. The organizations claim the government exceeded its authority by making the forgiveness announcement in July, only weeks after the Supreme Court had ruled against a larger cancellation scheme backed by President Joe Biden.
The lawsuit requests a court order blocking the Education Department from enforcing the cancellation until the move’s legality can be determined. The Department of Education has referred to the lawsuit as an attempt by far-right special interest groups to keep hordes of student borrowers in debt.
The Biden administration announced loan forgiveness for 804,000 people with qualifying incomes on July 14. The programs have always included termination after 20 or 25 years of payments; nevertheless, “past administrative failures” have caused erroneous payment tallies, pushing borrowers back. A “one-time adjustment” was announced, which would treat specific periods of prior nonpayment as if the debtors had been paying payments regularly during that time. It put 804,000 debtors beyond the 20 or 25-year barrier required for cancellation and brought millions more in striking distance.
Because they employ borrowers working toward student debt cancellation via Public Service Debt Forgiveness, conservative organizations claim Biden’s idea undermines the program.
They argue that Biden’s intervention unlawfully hastens the relief process, which is bad news for nonprofits that depend on PSLF to attract and retain college graduates.
Before the Supreme Court invalidated the canceling scheme, the Cato Institute sued the government. The Mackinac Center is contesting the expiration of Biden’s moratorium on student loan payments, which is set to take effect on October 1.
