Small Business Group Files Lawsuit Over Biden Student Loan Plan | News, Sports, Jobs


FILE – President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, on Aug. 24, 2022, in Washington. A small business advocacy group has filed a new lawsuit seeking to block the Biden administration’s efforts to forgive the student loan debt of tens of millions of Americans. (AP Photo/Evan Vucci, File)

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

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 a handful of lawsuits that have been filed by conservative business groups, lawyers and Republican lawmakers in recent weeks as the Biden administration tries to push through its plan to write off billions in debt ahead of November’s midterm elections.

Elaine Parker, president of the Job Creators Network Foundation, criticized the program as executive overreach, complaining that it does nothing to address the root cause of rising debt: the “outrageous increase in college 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 provide their views to the government.” She added: “These colleges need to be held accountable for this student debt crisis.”

The Job Creators Network Foundation has previously gone to court to try to block the Biden administration’s COVID-19 vaccine mandate on businesses. He also sued Major League Baseball in 2001 for moving the All-Star Game out of Atlanta due to objections to changes in Georgia’s election laws. That lawsuit, which cited losses to local businesses, was later dropped.

The new lawsuit is one of a growing number of legal challenges trying to stop President Joe Biden’s proposal put forward in late August to write off up to $20,000 in debt for certain borrowers.

Six Republican-led states filed a lawsuit late last month accusing the Biden administration of overstepping its executive powers, as did the Pacific Legal Foundation, a Sacramento, California-based legal advocacy group. Their lawsuit, filed in federal court in Indiana, calls the plan an illegal overreach that would increase the state tax burden for some Americans who are forgiven debt.

Meanwhile, a federal judge in Wisconsin last week dismissed a lawsuit by a local taxpayer group, the Brown County Taxpayers Association, that sought to block the program and ruled that the group had no right to sue. The group argued that Biden’s order illegally circumvented Congress’s spending power and said the plan was discriminatory because it sought to provide particular help to borrowers of color.

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

The lawsuit includes two plaintiffs: one who does not qualify for debt forgiveness because the plan excludes business loans that are not delinquent, and one who did not receive a Pell Grant and is therefore entitled to debt forgiveness. less according to plan.

“Behind closed doors, the Department enacted a new Debt Forgiveness Program that will affect tens of millions of Americans and cost hundreds of billions of dollars.” the lawsuit says. “Instead of providing notice and seeking public comment, the Department crafted critical details of the Program in secret and with an eye to ensuring debt forgiveness in time for the November election.”

It also alleges that the department “He made numerous arbitrary decisions about the Program, including who will receive debt forgiveness, how much of their debt will be forgiven, and the types of debt that will qualify for the Program.”

“The result of this arbitrariness is predictable: some will benefit handsomely, some will be defrauded, and others will be completely excluded.” it reads.

The case was assigned to US District Judge Reed O’Connor, who in 2018 notably ruled that the Affordable Care Act was unconstitutional. The Supreme Court reversed that decision last year. O’Connor, appointed by former President George W. Bush, also ruled against other policies pursued by Democratic administrations. Last month, he ruled that a provision in the ACA requiring coverage of an HIV prevention drug violates the religious beliefs of a Texas employer.

Civil lawsuits filed in Fort Worth federal court have a 90% chance of going to O’Connor or Judge Mark Pittman, appointed by former President Donald Trump, according to a 2020 court order.

White House spokesman Abdullah Hasan responded with a statement defending the loan forgiveness program.

“While opponents of our plan side with special interests and try by all means to keep millions of middle-class Americans in debt, the president and his administration are fighting to legally give middle-class families a breathing space. as they recover from the pandemic. and prepare to resume loan payments in January,” he said in a statement.

Biden’s debt forgiveness program will cancel $10,000 in student loan debt for people making less than $125,000 a year or for households making less than $250,000. Pell Grant recipients, who generally demonstrate greater financial need, will be eligible to receive an additional $10,000.

The Biden administration used a law passed after the September 11, 2001, terrorist attacks as legal justification for the program. The law gives the administration “sweeping authority” to reduce or eliminate student debt during times of 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 that the program will cost taxpayers $400 billion over the next three decades.

___ Associated Press writers Seung Min Kim and Mark Sherman contributed to this report.

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