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Green Bay lawsuit challenging President Biden's student loan forgiveness plan

Biden Student Loans
Posted at 2:06 PM, Oct 04, 2022
and last updated 2022-10-04 17:06:36-04

GREEN BAY (NBC 26) — The Wisconsin Institute for Law & Liberty is filing a lawsuit against the Biden administration over the student loan forgiveness plan.

WILL is representing the Brown County Taxpayers Association in its legal action. BCTA said it filed a three-count complaint in Eastern Wisconsin’s US Federal District Court in Green Bay.

BCTA said in a statement that President Biden’s One-Time Student Loan Debt Relief Plan violates the U.S. Constitution’s separation of powers between Congress and the Executive branch. The complaint also claims the Plan breaches the 5th Amendment’s equal protection doctrine by expressly stating that its purpose is to advance “racial equity”.

According to WILL, the listed plaintiffs are President Biden, Education Secretary Miguel Cardona, COO of Federal Student Aid Richard Cordray, U.S. Dept. of Education and the Office of Federal Student Aid.

Previous reports state Biden's plan promises to cancel $10,000 in federal student debt for borrowers with incomes of less than $125,000 per year or households making less than $250,000. Those who received federal Pell Grants to attend college would get an additional $10,000 erased.

An application to receive the benefit is expected by early October.

Conservative groups have been threatening to challenge debt cancellation since Biden first aired the idea, saying it's legally questionable and unfairly cancels student debt at the expense of Americans who didn't attend college. One of the main challenges has been finding someone who faces personal harm as a result of Biden's plan, giving them legal standing to sue.

The Biden administration has repeatedly argued that the plan is on solid legal ground.

In its legal justification for debt cancellation, the Biden administration invoked the HEROES Act of 2003, which aimed to provide help to members of the military. The law gives the administration "sweeping authority" to reduce or eliminate student debt during a national emergency, the Justice Department said in an August legal opinion.

Education Secretary Miguel Cardona has said he has the legal authority to cancel debt for people who faced hardship during the pandemic.

WILL's lawsuit filed in Green Bay disputes the use of the HEROES Act and argues that officials from the previous two administrations have determined that the president does not have the power to forgive student loans in this manner.

WILL said they are also filing motions for a preliminary injunction – as well as a restraining order until the injunction is granted – to prevent the forgiveness or cancellation of any federal student loan before a decision is reached.

A White House spokesperson did not immediately respond to requests for comment on the lawsuit, but White House press secretary Karine Jean-Pierre addressed resistance to loan forgiveness in a briefing on Tuesday.

“It’s a shame that you have Republicans out there – Republican groups, Republican states that are trying to stop Americans from getting a little bit of a breathing room,” she said, adding, "We’re talking about 40 million Americans that could benefit from getting student loan relief. It is shameful that they are siding with the special interests. It is shameful that they are not siding with the American people on this.”

Similar lawsuits have been filed in other states. In Indiana, a libertarian group is arguing that Biden’s plan creates additional tax burdens for students who would have their loans forgiven by other means. Six Republican-led states also filed a lawsuit in Missouri last week raising specific objections to loan forgiveness for federal loans that are owned by private banks. The Biden administration quickly removed eligibility for the estimated 770,000 borrowers with such loans.

This story contains content from the Associated Press.