Loan war looms

Conservative groups are intent on challenging Biden's student-debt plan

News Desk :
To find the authority to cancel billions of dollars in student loans, President Biden turned to two words in a 2003 law: “national emergency.”
President George W. Bush had troops in Afghanistan and Iraq when Congress passed the Higher Education Relief Opportunities for Students Act of 2003. The bill gives the Secretary of Education authority to change student financial assistance programs during a war, military operation, or “national emergency.”
Nineteen years later, the Biden Administration cited that law in announcing a plan to forgive up to $10,000 of student-loan debt (and $20,000 of education debt for Pell Grant recipients) for those earning less than $125,000. The national emergency it cited was the COVID-19 pandemic and economic fallout stemming from it.
That reasoning is almost certain to be challenged
in court. But who can legally challenge the order is unclear. As soon as Biden announced his order, various conservative legal groups began exploring who would have legal standing to sue, which would require proving they would be harmed by Biden’s order. One possibility: the House could sue over the order next year, if Republicans win enough seats to take control in the fall.
“It’s on shaky legal ground at best,” says Lanae Erickson, the senior vice president for social policy, education, and politics at Third Way, a Washington think tank that looks for nonpartisan policy solutions. Erickson is concerned that Biden’s action overreaches in its reliance on the national emergency of the pandemic and that the courts will determine such a step requires congressional action. “The connection to the pandemic is pretty exaggerated, I think.”
Biden’s order followed his promise on the campaign trail to take action to help some of the 44 million Americans with a collective $1.7 trillion in education debt hanging over their heads. Last year, Biden himself said he wasn’t sure he could use executive action alone to forgive a large tranche of student debt like $50,000 per borrower. “I don’t think I have the authority to do it by signing with a pen,” he said in February 2021.
But since he announced the loan-debt forgiveness actions, the Administration has rejected doubts about his authority to act.
The federal government temporarily suspended student-loan payments early on in the pandemic. That suspension is set to end on Dec. 31. The loan-forgiveness plan is targeted to go into effect the next day.
“Part of what the legal authority is being used to do here, in a targeted way, is to make sure that those borrowers who are at highest risk of distress after the restart happens, those are the people who are going to get the relief,” says Bharat Ramamurti, the deputy director of Biden’s National Economic Council.
SINCE BIDEN ANNOUNCED the order on Aug. 24, legal groups and experts have speculated on who might have standing to challenge it. Companies that service the student loans may attempt to prove they’ve been harmed. A person who makes an income just over the $125,000 threshold for forgiveness could potentially claim to have standing.
Or one of the chambers of Congress could try to take the Biden Administration to court, arguing that Biden’s loan action steps on congressional power over the nation’s finances. But such a move could only happen if Republicans won enough seats to take control of the House or Senate.
Such a suit would not be unprecedented. In 2014, the Republican-controlled House voted to sue the Obama Administration over its application of the Affordable Care Act. Though House Republicans were ultimately granted standing to sue, that lawsuit ended up having little effect on the implementation of the law. In 2019, House Democrats sued the Trump Administration over its spending on building a border wall.
If Republicans take back control of the House, minority leader Kevin McCarthy is the front runner to be the next Speaker. McCarthy’s office would not comment on whether House Republicans would sue the Biden Administration over the student-loan action if they gained control of the chamber. “I would expect there would be challenges-this is such a slap in the face to everybody who did what they were supposed to do,” says Reed Rubinstein, the director of oversight and investigations for the America First Legal Foundation, which was founded by Stephen Miller, a former senior adviser to former President Donald Trump.
Rubinstein says that it is too early to know if his organization, which has challenged multiple Biden Administration policies, would get involved in challenging the loan forgiveness. He did think that Congress would have standing to bring a case to protect its institutional interests over the power of the purse.
The Job Creators Network Foundation Legal Action Fund, which successfully sued the Biden Administration in 2021 over vaccine mandates on behalf of small-business owners, is “actively weighing its legal options,” says president and CEO Alfredo Ortiz in a statement.
-Courtesy: Time