Active: Federal lawsuit filed in the Northern District of Texas
On August 24, the Biden Administration announced plans to forgive up to $20,000 in student loan debt per borrower earning less than $125,000 per year ($250,000 per household). The action is expected to forgive loans for over 40 million borrowers, with as many as 20 million getting the remainder of their student loan balance forgiven. According to the Congressional Budget Office, the bailout will cost taxpayers around $400 billion. Biden’s bailout would also accelerate inflation at the worst possible time – something that even Democrat economists have acknowledged.
Worse yet, the directive does nothing to hold colleges accountable for their outrageous tuition prices that fund high executive pay, an army of administrators who provide little to no value, and the construction of resort style amenities. Why don’t we see Biden calling out the heads of these universities that are sitting on $700 billion in endowments while these students drown in debt?
But beyond the high cost and unfairness of the debt cancellation lies a larger problem: it is completely illegal and constitutes an unprecedented power grab from the executive branch.
In particular, the student loan bailout violates the Administrative Procedure Act’s basic notice-and-comment procedures for regulations. Federal courts in the past have affirmed that the notice-and-comment phase is conducive to good government: “to ensure that unelected administrators, who are not directly accountable to the populace, are forced to justify their quasi-legislative rulemaking before an informed and skeptical public.”
In response to this executive overreach, the JCNF Legal Action Fund filed a lawsuit to block this arbitrary fiat on October 10, retaining the services of the law firm Consovoy McCarthy. In our complaint filed in the U.S. District Court for the Northern District of Texas, we argue that two of our plaintiffs–Myra Brown and Alexander Taylor–were denied the ability to comment on the proposed regulation by the U.S. Department of Education.