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Biden is being sued!
The Pacific Legal Foundation filed a lawsuit on Tuesday against the Biden Administration for its policy to cancel up to $10,000 in student debt for millions of borrowers.
The group argued in a complaint that President Biden’s use of the HEROES Act, a 2003 law meant to aid Iraq War veterans and their families, as a justification for the move happened with “breathtaking informality and opacity.”
Frank Garrison, a public defense attorney at the Pacific Legal Foundation and the plaintiff in the lawsuit, will personally face a tax liability from Indiana due to the cancellation of his debt.
Congress did not authorize the executive branch to unilaterally cancel student debt,” Pacific Legal Foundation attorney Caleb Kruckenberg said in a statement.
“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.”
The new student loan cancellation plan applies to individuals earning less than $125,000 annually. Biden has also decided to extend the pause on federal student loan payments to January of 2023 and he will permit borrowers with undergraduate loans to cap payments at 5% of monthly income.
The complaint added that the Department of Education failed to comply with the “notice-and-comment process required for rulemaking” when charting the debt cancellation policy and didn’t “solicit and public input.”
“Cancelling student debt is unjust to those who have paid their loans or never took any. It will only lead to more calls for government intervention in education at taxpayers’ expense,” Pacific Legal Foundation senior attorney Steve Simpson added. “Loan cancellation will make Americans more divided, as those who paid their loans — or never went to college — will have good reason to think that we no longer have a government of, by, and for the people.”
According to the Brookings Institute, one-third of student debt is held by the wealthiest 20% of households. To compare, only 8% is held by the bottom 20%.
According to a non-partisan analysis from the University of Pennsylvania’s Wharton School, eliminating $10,000 of student loans per borrower will cost $298 billion in 2022 and a total of $329 billion by 2031 if the policy is renewed each year.
They also found that 42% of the benefit would impact Americans earning more than $82,400 per year.
An estimate from the Congressional Budget Office forecasts that the overall cost will be $400 billion, with another $20 billion incurred because of the pause on repayments.
The Pacific Legal Foundation contends that the student loan cancellation is an “election year ploy” and says it is a severe abuse of power.
