Republicans are readying lawsuits to block Biden’s student debt plan
The Washington Post September 1, 2022
WASHINGTON — Republican state attorneys general and other leading conservatives are exploring a slew of potential lawsuits targeting President Joe Biden’s plan to cancel some student debt — challenges that could limit or invalidate the policy before it takes full effect.
In recent days, a number of GOP attorneys general from states including Arizona, Missouri and Texas have met privately to discuss a strategy that could see multiple cases filed in different courts around the country, according to a person familiar with their thinking who spoke on the condition of anonymity to describe the confidential talks.
Other influential conservatives — including Sen. Ted Cruz, R-Texas, and allies of the Heritage Foundation, a conservative think tank — are mulling their own options as they ratchet up criticism of Biden’s debt-relief plan, two additional people familiar with the matter said. And a conservative advocacy group founded by a major Trump donor said it would file a lawsuit against the policy.
“The conservative public interest law firms in our network are exploring filing lawsuits against this. They are doing background legal research, trying to find out who might be the most suitable clients for them,” John Malcolm, director of the Meese Center at the Heritage Foundation, said in an interview. “They have to find a client with the standing and the gumption to take on a lawsuit. There are several groups in our network who are exploring that right now.”
All of the sources cautioned that no decisions have been made — and as of Thursday morning, no lawsuits appeared to have been filed. But a legal battle could carry stark financial consequences for millions of student borrowers, who rejoiced last week after Democrats delivered on a long-standing promise to erase some of their debt.
The possible litigation also raises the prospect of a broader, precedent-setting courtroom tussle over the scope of the president’s economic authority. Such a lawsuit could reach the Supreme Court, thrusting it back into the spotlight after it infuriated Democrats by stripping abortion protections and limiting the Environmental Protection Agency’s power to respond to climate change.
Under Biden’s plan, announced last week, the government is set to forgive up to $10,000 in federal college debt — or $20,000 if borrowers also received Pell Grants, which typically go to lower-income students. While the plan is less generous than some in the Democratic Party initially sought, it still marks a major financial benefit for many debtors — some of whom expressed horror that they could lose the help before it even arrives.
“That would be terrible,” said Michael Loomus, 31, who works as a call center supervisor in Ohio, referring to the prospect of the courts blocking Biden’s plan. Loomus has struggled to pay down his $11,400 in student loans since dropping out of the University of Toledo, but most of his debt would be wiped away by the president’s plan.
“It just seems they are continuously trying to keep borrowers in debt,” Loomus added. “I don’t make a lot of money ... and before this, it just felt like I’d never pay off my loans.”
The Biden administration has been adamant that its policy is legal. The Justice Department released a 25-page memo last week justifying debt cancellation as “appropriate” under a 2003 law giving the executive branch broad authority to overhaul student loan programs. That law was passed in the aftermath of the Sept. 11, 2001, terrorist attacks and gave the president the authority to cancel student debt in connection with national emergencies — which the White House says includes the ongoing pandemic.
“The legality is very, very strong. ... The language of the Heroes Act states that in a national emergency the president can take action that includes suspending or canceling debt,” said Laurence Tribe, a Harvard law professor close with the Biden administration.
The White House did not immediately respond to a request for comment Wednesday evening. Bharat Ramamurti, deputy director of the White House National Economic Council, stressed to reporters last week that Biden was using the same authority that the Trump administration had invoked to extend a pause on student loan payments earlier in the pandemic. “That has not been challenged in court. It has not been found improper by a court. It’s the same statute that the previous administration used and that we’ve used, that we are now using for this action,” Ramamurti said.
He added: “We believe we’re on strong legal ground.”
Spokespeople for the Arizona, Missouri and Texas attorneys generals did not respond to requests for comment. The most recent talks among GOP attorneys general and their staff occurred Wednesday, the person familiar with the matter said.
Conservatives have called the debt forgiveness plan fiscally irresponsible and unfair to the millions of Americans who never attended college or already paid off their education loans. Republicans have also said the plan is illegal because it wrests spending powers given to Congress, arguing that the 2003 law was never intended to give the executive branch such unilateral, broad authority.
Cruz, who ran for president in 2016, has emerged as one of the leading GOP critics of the plan but acknowledged in a radio interview released Wednesday that it remains unclear who will have legal “standing” — or cause to challenge the decision — in court. A spokesman for Cruz declined to comment, referring a reporter to Cruz’s comments in that interview.
Cruz said that the courts are unlikely to deem an average taxpayer as qualified to bring a lawsuit. It may be possible to find a plaintiff who earned slightly more than the amount necessary to qualify for debt forgiveness, according to the senator, but it is “not at all clear a court would buy that argument.”
And Cruz added a lawsuit could be filed by a current student who would argue that the debt forgiveness plan will lead colleges to raise tuition, unfairly subjecting students to higher fees.
“The difficulty here is finding a plaintiff who the courts will conclude has standing,” Cruz said. “That may prove a real challenge.”
Still, conservatives have raced to find a plaintiff. The president of the Job Creators Network — founded by Bernie Marcus, a GOP donor who started Home Depot — said Wednesday that it is already building a legal team and working with outside advisers on preparing a lawsuit.
“We’re taking this on ... we’re in the middle of lining up our plaintiffs,” Alfredo Ortiz, CEO of the Jobs Creator Network, told Fox News recently. “As soon as they drop all the specifics on this, we’ll be taking it to court.”
Separately, some lawmakers have eyed their own intervention in such a case. Rep. Byron Donalds, R-Fla., told The Washington Post he is exploring options for suing Biden over the policy.
Some independent legal experts say a legal challenge could prove successful. Jed Handelsman Shugerman, a professor at Fordham Law School, said the Justice Department memo justifying the policy because of the coronavirus did not fit either the nature of the broad action or the way the White House has defended it. Introducing the plan, Biden spoke primarily of fixing a broken system of higher education and put less emphasis on offering emergency relief due to the pandemic.
Shugerman stressed that he supports student debt cancellation and wants the administration to change its legal argument so it does not get struck down by the Supreme Court.
“If they keep going with this argument and this interpretation of the statute, it is likely they will lose 6 to 3, and it’s possible they could lose by more than 6 to 3,” Shugerman said. Without a shift in administration strategy, Shugerman said, “I foresee this good policy being rightly struck down by the courts on legal terms.”
Adam Minsky, a Boston lawyer who specializes in student debt issues, said it is hard to predict exactly where the Supreme Court would come down on the matter but that the main legal question is likely to be whether any plaintiff has standing to sue. Litigation could result in an emergency injunction halting the policy just as it goes into effect, he said, creating chaos for tens of millions of borrowers — possibly right before the midterm elections this fall.
“That would be a mess,” Minsky said. “There may be enough justices who say they went too far.”