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Legal Challenges to Student Loan Debt Forgiveness Grow

The latest challenge to overturn the Biden administration’s student loan debt forgiveness plans focuses on congressional approval needed for the plan and racial equity.

10/5/2022 2:30 P.M.

2.5 minute read

A Wisconsin law firm is the latest to file suit seeking to overturn the Biden administration’s student loan forgiveness plans.

The Wisconsin Institute for Law and Liberty (WILL) filed the lawsuit against President Joe Biden and the U.S. Education Department on behalf of the Brown County Taxpayers Association, USA Today reports.

Student loan debt relief “takes from one group of people and arbitrarily distributes the spoils to another group,” Brown County Taxpayers Association President Rich Heidel said in a statement, according to the article. “The [p]lan amounts to nothing more than a modern-day version of King George III’s Stamp Act where there was massive taxing and spending without participation of the [p]eople’s representatives.”

WILL has asked the court to immediately block the student loan forgiveness plans while the legal challenge proceeds “to prevent something quite irreversible and damaging,” according to USA Today.

“WILL alleges that Biden doesn’t have unilateral power to forgive student loans without congressional approval and that the forgiveness program was created with racial motivations in violation of the ‘equal protection doctrine,’ which requires the government to treat an individual in the same manner as others in similar circumstances,” it reports.

According to the lawsuit, the White House has said the goal of the program is to “narrow the racial wealth gap” and “advance racial equity.”

Meanwhile, six state attorneys general have filed suit against the Biden administration for overreach of its executive powers in its student loan forgiveness plan, ACA International previously reported.

The same day as that legal challenge was filed, the Biden administration and U.S. Department of Education scaled back the eligibility for student loan forgiveness.

According to the DOE website, privately held federal student loans must have been consolidated before Sept. 29 in order to be eligible for relief.

The state attorneys general case against the DOE follows a federal lawsuit from the Pacific Law Foundation arguing congressional approval is needed for such mass student debt relief by the Biden administration, ACA previously reported.

The states’ lawsuit, filed in federal court in St. Louis, asks the court for an immediate temporary restraining order pausing the program, according to a news release from Missouri Attorney General Eric Schmitt. “The Biden administration’s unlawful edict will only worsen inflation at a time when many Americans are struggling to get by.”

The Pacific Legal Foundation’s lawsuit has similar grounds, although the judge in the case denied the plaintiff’s motion for a temporary restraining order and preliminary injunction blocking the student loan forgiveness policy, according to reason.com.

A separate state case challenging the DOE’s student loan forgiveness also calls into question the costs and impact on the economy from the student loan forgiveness and payment pauses.

A lawsuit in an Oregon District Court is challenging the DOE and Secretary of Education Miguel Cardona’s authority to discharge or forgive student loan debt on a mass basis under the Higher Education Relief Opportunities for Students (HEREOS) Act of 2003, ACA previously reported.

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