Small business group files lawsuit against Biden’s student loan plan

WASHINGTON (AP) — A small business advocacy group has filed a new complaint seeking to block the Biden administration’s efforts to write off the student loan debt of tens of millions of Americans – the program’s latest legal challenge.

The lawsuit, filed Monday by the Job Creators Network Foundation, argues that the Biden administration violated federal procedures by failing to seek public input on the program. It’s one of the few lawsuits that have been filed by conservative business groups, lawyers and Republican lawmakers in recent weeks as the Biden administration tries to push ahead with its plan to write off billions in debt before the November midterm elections.

Elaine Parker, president of the Job Creators Network Foundation, called the program an executive overreach and complained that it did nothing to address the root cause of the growing debt: “the outrageous increase in tuition that exceeds inflation every year”.

“This bailout is going to affect everyone in this country because of the massive size of the program,” she said. “And everyone should have the opportunity to give their views to the government.” She added: “These universities must be held accountable for this student debt crisis.”

The Job Creators Network has already taken legal action to try to block the Biden administration’s COVID vaccination mandate on businesses. He also sued Major League Baseball in 2021 for move the star game of Atlanta over objections to changes to Georgia’s election laws. The lawsuit, which cited losses to local businesses, was later dropped.

The new lawsuit is part of a growing number of legal challenges to President Joe Biden’s proposal in late August to forgive up to $20,000 in debt for certain borrowers.

Six Republican-led states filed suit late last month, accusing the Biden administration of overstepping its executive powers. And the Pacific Legal Foundation, a legal advocacy group in Sacramento, California, sued in federal court in Indianacalling the plan an illegal overspending that would increase state tax burdens for some Americans who would get their debt forgiven.

Meanwhile, a Wisconsin federal judge last week dismissed a lawsuit from a local taxpayer group, the Brown County Taxpayers Association, which sought to block the program, ruling that the group lacked standing to sue. The group had argued that Biden’s order illegally circumvented Congress’s spending power and said the plan was discriminatory because it sought to provide special relief to borrowers of color.

The latest lawsuit, filed in District Court for the Northern District of Texas against the US Department of Education and its secretary, Miguel Cardona, challenges how the plan was developed. He alleges that the Biden administration violated the notice and comment procedures of the Administrative Procedure Act. He also challenges the administration’s legal justification for the program.

The lawsuit includes two plaintiffs: one who is not eligible for debt forgiveness because the plan excludes loans held by companies that are not in default, and one who did not receive a Pell grant and therefore has entitled to less debt forgiveness under the plan.

“Behind closed doors, the Department has enacted a new debt forgiveness program that will affect tens of millions of Americans and cost hundreds of billions of dollars,” the lawsuit states. “Instead of providing advice and soliciting public comment, the Department has been working out critical details of the program in secrecy and with the goal of securing debt cancellation in time for the November election.”

It also alleges that the department “made numerous arbitrary decisions regarding the program, including which people will receive debt forgiveness, how much of their debt will be forgiven, and what types of debt will be eligible for the program.”

“The result of this arbitrariness is predictable: some will benefit generously, some will be harmed and others will be left entirely aside”, can we read.

The Biden Debt Cancellation Program will cancel $10,000 in student loan debt for people earning less than $125,000 a year or households earning less than $250,000. Pell grant recipients, who generally demonstrate greater financial need, will be eligible for an additional $10,000.

The Biden administration used a law passed after the September 11, 2001, attacks as legal rationale for the program. The law gives the administration “absolute authority” to reduce or eliminate student debt during a national emergency, the Justice Department said in an August legal opinion. The administration cited the COVID-19 pandemic as its emergency.

The Congressional Budget Office estimates the program will cost taxpayers $400 billion over the next three decades.

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