6 States Sue Biden, Education Secretary Over Student Debt Cancellation

Six states on Sept. 29 sued President Joe Biden and his education secretary, asserting that their bid to cancel thousands of dollars in student debt for millions of Americans is illegal.

“It is the epitome of unlawful and arbitrary agency action, and it should be set aside,” officials with Nebraska and five other states said in the lawsuit, filed in federal court in Missouri.

The officials are challenging a Biden administration plan that would cancel up to $20,000 in federally-held student debt for individuals making less than $125,000 a year, or married couples who earn less than $250,000 a year. Administration officials estimate over 40 million Americans are eligible.

The problem, according to the new suit, is that the justification for the move doesn’t hold.

The Department of Education asserted that the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) as giving the authority to cancel so much debt for so many people due to the COVID-19 pandemic. The law enables the education secretary to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … in connection with a war or other military operation or national emergency.” The administration cited the COVID-19 pandemic as the national emergency.

But even the Department of Justice’s legal opinion (pdf) ostensibly in support of the move concluded that any cancellation must be “structured to put loan recipients back into the financial position they would be in were it not for the national emergency” and limited only to the harm that has a relation to the borrower’s federal loans, “no matter how much [total] financial harm a borrower may have suffered because of a national emergency,” the suit notes.

“The Biden Administration’s Mass Debt Cancellation does not even attempt to meet these requirements. It instead justifies relief for all borrowers whose debt

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