Biden Administration’s Student Debt Relief Order Is Illegal: Lawsuits
President Joe Biden’s administration has been hit with the first lawsuits against a recently unveiled order that would—unless blocked—cancel thousands of dollars in debt for millions of Americans.
Biden, a Democrat, and Education Secretary Miguel Cardona, a Biden appointee, announced the order in August, revealing that people with student debt could receive up to $20,000 in relief if they meet certain conditions. Administration officials say over 40 million people are likely eligible for the relief.
The problem, according to the suits, is that the order is not legal.
“Nothing about loan cancellation is lawful or appropriate. In an end-run around Congress, the administration threatens to enact a profound and transformational policy that will have untold economic impacts. The administration’s lawless action should be stopped immediately,” one suit, filed in federal court in Indiana, states.
The “plain language and context” of the law that the administration cited does not give Cardona the authority to discharge or forgive student loan debt on a blanket basis, the other suit, filed in U.S. court in Oregon, says.
The Department of Education referred a request for comment to the White House, which did not immediately respond to a query.
Legal Basis
The U.S. government holds approximately $1.6 trillion in student debt, for more than 45 million people.
The debt is held in part by two systems—the Direct Loan Program and the Federal Family Education Loan Program. Under Cardona’s order, $10,000 to $20,000 in debt would be canceled for individuals who earn less than $125,000 per year or households that earn less than $250,000 per year.
The administration cited the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which says that the Department of Education can “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” when “necessary in connection with a war
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