Biden’s Promise To Cancel Student Debt Has Faced Legal Hurdles — And More Could Likely Be On The Way

President Joe Biden has faced several legal challenges since trying to fulfill his campaign promise to cancel student loans, and legal and education experts told the Daily Caller News Foundation that more could be on the way.

The Supreme Court struck down Biden’s previous student debt relief plan in June 2023, but the president has since attempted to introduce new ways to wipe out loans through the Saving on Valuable Education (SAVE) plan and a new program announced on April 8. Two lawsuits from Republican attorneys general were filed against the SAVE plan in March and April, and experts told the DCNF that the plans are “dubiously legal” and expand “statutes well beyond the original meaning.”

“We’re living under an administrative dictatorship, essentially, where unelected bureaucrats are expanding statutes well beyond the original meaning to regulate Americans and corporations in ways Congress would never have assented to, as we have unelected bureaucrats using big statutes to impose regulations that the far left will never get through Congress,” Dr. Jonathan Pidluzny, director of the America First Policy Institute’s Higher Education Reform Initiative, told the DCNF.

The administration attempted in 2022 to push through loan forgiveness for nearly 40 million Americans via the 2003 HEROES Act, which allows the secretary of education to “waive or modify” certain requirements for financial assistance due to national emergencies. The Supreme Court, however, ruled in Biden v. Nebraska that the HEROES Act “provide[d] no authorization for the Secretary’s plan.”

The Biden administration announced the SAVE plan just weeks after the court’s decision, and would limit student loan repayments to 5% of a person’s monthly income from its current limit of 10% and would also forgive $12,000 in debt after 10 years. The plan is now at the center of two lawsuits from 18 total attorneys general, the first led by Kansas and the other by Missouri, which claims that Biden is abusing the executive branch’s authority.

Missouri’s lawsuit says that Biden is attempting to “sidestep the Constitution” and “impose drastic, costly policy changes on the American people without their consent.” The complaint also notes that Biden’s SAVE plan will cost “more than double” his previous plan before the court struck it down.

“The President, in fact, was in such a rush to defy the Supreme Court that the Federal Government failed to update the Final Rule to account for the Supreme Court’s decision,” the lawsuit reads. “Not only does the rule never cite Biden v. Nebraska, but it even goes so far as to conduct a cost-benefit analysis on the false assumption that the Supreme Court had upheld the rule when the Supreme Court, in fact, did the opposite.”

Biden launched an additional executive action on Monday that would “eliminate accrued interest for 23 million borrowers, would cancel the full amount of student debt for over 4 million borrowers, and provide more than 10 million borrowers with at least $5,000 in debt relief or more,” according to a press release. The administration is relying on the Higher Education Act, which oversees federal higher education programs and helps provide financial assistance for students.

While the Biden v. Nebraska decision concerned different laws, Jack Fitzhenry, a legal fellow at the Heritage Foundation’s Edwin Meese III Center for Legal and Judicial Studies, told the DCNF that the same overall “takeaways” regarding the limitations of power in the executive branch could be applied to the new plans as they move through the court system.

“I think they will have a rather immediate application to the plans that are being implemented now,” Fitzhenry said. “While it’s true, that Biden v. Nebraska dealt with one specific plan, with a sort of unique statutory basis, and it doesn’t, by itself, foreclose the efforts the administration is undertaking now, I think it will certainly be relevant to the legal assessment of these current efforts and I suspect it will likely be fatal to the legality of the administration’s current efforts.”

The official rules for the plan have not yet been released and will require a public comment period, but Jim Blew, the co-founder of the Defense of Freedom Institute, said that the attorneys general who are suing over the SAVE plan may have “similar grounds” to file suit against the latest attempt.

“We don’t believe that the Higher Education Act gives them the authority to do this,” Blew told the DCNF. “We think it’s a major question that will be struck down, but there’s a step before we get to the actual litigation and that is that Congress has the authority to review and repeal any rule that the administrative departments, or any agency, including the Department of Education, release. Congress gets to review it, so it may not even need to be litigated because we hope Congress might repeal it.”

If implemented, the president’s new debt relief program would increase the cost for taxpayers by an estimated $84 billion on top of the $475 billion in student loan forgiveness the administration is expected to dole out over the next 10 years through the SAVE plan, according to the Penn Wharton Budget Model. Blew explained that Biden’s push for these plans, legal questions aside, is likely tied to his reelection efforts in November.

“He’s trying to appeal to student borrowers to say ‘I’m in your corner, remember me in November,’” Blew told the DCNF. “But we don’t know how the legal side will work out for his political campaign.”

The initiatives are part of a “broader pattern” of the administration pushing “a lot of executive action,” despite much of it being “dubiously legal,” Fitzhenry told the DCNF.

“Some parallels are drawn in the complaints to things like the eviction moratorium and the vaccine mandate,” Fitzhenry said. “The administration has been on notice even as it was trying to do these things that they were probably unlawful, but it decided to move forward anyway. I think this partakes of the same general spirit and it’s a little disheartening.”

The White House did not respond to the DCNF’s request for comment.


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