A nonprofit legal group filed a lawsuit Tuesday against the U.S. Department of Education to block its move to cancel up to $20,000 in student loan debt for some borrowers.
“Congress did not authorize the executive branch to unilaterally cancel student debt,” Pacific Legal Foundation attorney Caleb Kruckenberg said. “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 lawsuit, the first of what is expected to be many, comes a day after the nonpartisan Congressional Budget Office released an official cost estimate for President Joe Biden’s student loan cancellation plan, putting the cost at more than $400 billion.
In August, Biden announced the Department of Education would provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Eligible borrowers must have individual income of less than $125,000 or $250,000 for married couples. Further, Biden said the pause on federal student loan repayment will be extended one final time through Dec. 31, 2022. The White House said borrowers should expect to resume payment in January 2023. That extended pause would cost taxpayers about $20 billion, according to the CBO.
“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,” said Steve Simpson, senior attorney at Pacific Legal Foundation. “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.”
The Pacific Legal Foundation has filed for a temporary restraining order to prevent the loan cancellation from going into effect.