The Patriot Post® · Legal Hurdles to Challenging Biden's Student Loan Scheme
As this writer and others here in our humble shop have already noted, Joe Biden is trying to take a giant eraser to college loan debt in a blatant election-year ploy to shore up the Democrat base — a base that has seemingly dwindled to women who demand abortions at any point of pregnancy and “woke” college graduates who can’t find a job suited to their gender studies major.
Since that time when the Democrats thought they’d successfully negated the upcoming “red tsunami,” two key events have occurred. First, individuals and states suing to stop the Biden student loan forgiveness program have nearly always seen their cases dismissed for lack of standing — with the federal government sometimes changing rules on the fly to deny plaintiffs a crack at the case. Second, a reported 22 million out of the 40 million eligible borrowers have applied for the reduction in debt. It doesn’t matter how much Biden stretches the truth or tells outright lies about the program — he’s banking that the courts will remain, as he says, “on Biden’s side.”
There is one case, though, Nebraska v. Biden, that was brought by six Republican states and has borne at least temporary fruit. The Eighth Circuit Court of Appeals hasn’t completely blocked the program but has ruled that it would harm tax revenues and investment portfolios and has thus temporarily stopped the administration from discharging any loans. The administration appealed yesterday.
Meanwhile, Margot Cleveland writes that two other cases could crack the standing code. The first involves two individual plaintiffs, Myra Brown and Alexander Taylor. Brown cannot have her loan forgiven because it’s commercially held, and Taylor only qualifies for a $10,000 forgiveness because he did not receive Pell Grants.
“Brown and Taylor argue that the Department of Education’s cancellation program is arbitrary and that had the secretary complied with the notice and comment mandates of the Administration Procedure Act, they and similarly situated debtors could have convinced the department to provide them relief,” writes Cleveland. “The Biden administration counters that the HEROES Act is exempt from the Administration Procedures Act and that these plaintiffs lack standing to sue.”
The other lawsuit comes from the CATO Institute, which is affected as a nonprofit that can take advantage of the student loan forgiveness program previously enacted by Congress for those who work in the nonprofit sector for 10 years. Cleveland notes, “Biden’s categorical cancellation of student loans will harm CATO and other nonprofits, the institute argues, since potential employees with student loans will no longer find it advantageous to work for a nonprofit.”
Perhaps these approaches will succeed, unlike attempts to use taxpayer standing, increased tax liability, or the states’ “sovereign interest.” But there’s an electoral consideration at work here: Given that the opposition has been portrayed as simply partisan Republicans and red states, any court decision halting the program will be hung like an albatross around their necks in order to motivate Democrat turnout.
As Biden phrased it, “I will never apologize for helping working Americans and middle-class people as they recover from the pandemic.” That’s malarkey, but it’ll play well with some voters.
Outside of the electoral challenge, though, there’s a second part of the Biden giveaway that may cost taxpayers just as much. Back in August, CBS News reported: “Consumer advocates have long criticized so-called income-based repayment plans, which are supposed to help make student loans more manageable and which are employed by about one-third of all borrowers, for trapping borrowers in debt. The Biden plan addresses the problem by proposing to have the federal government cover unpaid monthly interest for people with income-based repayment plans, which would prevent their loan balance from growing as long as they make their monthly payments.”
Just as colleges have continually increased their tuition and fees to take advantage of the manna of federal student loan money, with the students holding the bag, now there will be little incentive for lenders to have competitive interest rates when the taxpayers pick up the tab.
There are millions of us out there, this writer included, who used student loans to make their way through college, with private lending institutions sizing up the grades and income prospects of a borrower before making the investment. That all changed, though, when Uncle Sam completely took over the student loan program to — supposedly — save taxpayers money. And people fell for it.
But those who scrupulously paid off their loans or took a job that didn’t require a degree also got stuck with the bill. And we’re mad about this process because Joe Biden never should have put us through it.
Finally, a footnote: Biden made another couple of gaffes regarding this topic yesterday. First, he challenged opponents of his plan because, he asked rhetorically, “Guess who’s going to grow the economy more: An educated public or those guys?” By “those guys” he means the business owners who employ college graduates. The president, who like most of his administration has no private sector experience, apparently needs remedial economics.
But he also needs remedial government and civics. “It’s passed,” he declared of his forgiveness plan. “I got it passed by a vote or two.” False. Congress did not vote on his plan, which is one of the constitutional problems with it. Time for a nap, Joe.