Judge Denies Lawsuit Challenging Biden’s Student Debt Cancellation Program

Judge Denies Lawsuit Challenging Biden’s Student Debt Cancellation Program
President Joe Biden announces student loan relief in the Roosevelt Room of the White House in Washington on Aug. 24, 2022. (Olivier Douliery/AFP via Getty Images)
Naveen Athrappully

A federal judge has denied a lawsuit filed by the Pacific Legal Foundation (PLF) challenging the Biden administration’s plan to forgive student loans after the Department of Education (DoE) made some clarifications on its website.

The lawsuit was filed on behalf of public interest attorney Frank Garrison, a beneficiary of the congressionally authorized Public Service Loan Forgiveness program that will forgive his student loans once payments are made for 10 years. Garrison has been making regular repayments on the loans. Biden’s student loan cancellation program will automatically cancel his debts, but then stick him with a new tax bill, thus causing irreparable harm, the PLF argued.
However, the DoE updated its webpage on the student loan forgiveness program stating that those who wish to opt out of debt relief due to concerns about state tax liability will be allowed to do so.

As a result, U.S. District Court Judge Richard Young threw out the lawsuit’s motion for a temporary restraining order as well as a preliminary injunction to halt the forgiveness program.

“The court, in view of the fact the Department of Education exempted Plaintiff from receiving debt relief, finds Plaintiff cannot be irreparably harmed as is required for preliminary relief,” the court order states.

However, the judge allowed Garrison until Oct. 10 to file an amended complaint. The judge asked Garrison to consider whether he has any standing in the case and whether the DoE has taken “sufficient action for the case to be ripe for adjudication.”

“Plaintiff’s allegations speculate about the terms of the program. But as evidenced by the Government’s recent addition of an opt-out provision, the plan is still evolving,” the court stated.

Unconstitutional Act, Heavy Tax Burden

Following Judge Young’s decision, the PLF has promised to continue challenging the student debt cancellation program.
The entire program is “brazenly illegal from top to bottom,” said PLF attorney Michael Poon, according to The Hill. At no point did the Biden administration make a plausible argument that the underlying policy is legal, he stated.
“Congress did not authorize the executive branch to unilaterally cancel student debt,” Caleb Kruckenberg, an attorney at PLF, said in a Sept. 27 press release.

“It’s flagrantly illegal for the executive branch to create a $500 billion program by press release, and without statutory authority or even the basic notice and comment procedure for new regulations.”

In addition to Garrison’s lawsuit, Biden’s student cancelation program is also facing a lawsuit from six states led by Nebraska that are calling the administration’s decision illegal.

An analysis by the National Taxpayers Union Foundation estimates that the loan cancellation program will add $386 billion to $405 billion in net costs to taxpayers based on conservative assumptions. Each American taxpayer will have to bear a burden of over $2,500 due to the program.