A conservative group blocked student-loan forgiveness because 2 borrowers wanted more relief than they qualified for. Here's why it thinks no one else should get to benefit from Biden's plan.
The Supreme Court is hearing two lawsuits that blocked student-debt relief at the end of February.
One of the cases involves two student-loan borrowers who sued because they didn't qualify for the full $20,000 amount of relief.
Here are some key points that group argued in its case to the Supreme Court.
We have officially entered the month when the nation's highest court will take on President Joe Biden's student-loan forgiveness plan — and the groups opposing it are readying their arguments.
At the end of August, Biden announced his plan to cancel up $20,000 in student debt for Pell Grant recipients making under $125,000 a year, and up to $10,000 in relief for other federal borrowers within the same income cap. Just over a month later, on October 10, the Job Creators Network Foundation Legal Action Fund — a conservative organization — filed a lawsuit seeking to block the relief.
The group filed the suit on behalf of two student-loan borrowers: one who didn't qualify for the full $20,000 in debt relief since he was never a Pell Grant recipient, and another who has commercially-held student loans that do not qualify for Biden's loan forgiveness.
On Friday, it submitted its argument to the Supreme Court explaining why it thinks Biden's debt relief plan is illegal and should be blocked — especially because the two borrowers it is representing cannot benefit fully from the route the administration took to enact this relief.
"The Secretary decided the key details of the Program behind closed doors, including which individuals will receive debt forgiveness, how much of their debt will be forgiven, and which types of debt will qualify," the group wrote. "The result was predictable: some will benefit handsomely, some will be shortchanged, and others will be left out entirely."
Alongside this lawsuit, the Supreme Court will also be taking on a separate case filed by six Republican-led states who argued the debt relief will hurt their states' tax revenues, along with the revenue of student-loan company MOHELA.
Biden's administration filed its full legal defense in January, where it expressed confidence in its usage of the HEROES Act of 2003 to cancel student debt, which gives the Education Secretary the ability to waive or modify student-loan balances to help borrowers recover from a national emergency, like COVID-19.
"Extra breathing room for millions of Americans is on hold because of lawsuits brought by opponents of this Administration's student debt relief plan," the White House wrote on Twitter this week. "We are continuing to fight to deliver relief to tens of millions of eligible borrowers."
And those opponents are keeping up the fight on their end, as well. Here are some standouts from the Job Creators Network's argument on why Biden's student-loan forgiveness should be blocked.
Borrowers didn't have a chance to comment on Biden's plan
This lawsuit argues that enacting debt relief using the HEROES Act violates the plaintiffs' procedural rights because they did not have an opportunity to submit public comment on the plan. The filing said that the administration should have gone through the negotiated rulemaking process, which includes a public comment period, and failing to do was not in the best interests of borrowers.
For example, one of the plaintiff's parents made too much money while he was in college, therefore making him ineligible for the Pell Grant, but the lawsuit says he now "makes less than $25,000 a year, but individuals making exponentially more than that ($250,000 for joint filers or $125,000 for individuals) will receive $20,000 in debt forgiveness if they received a Pell Grant."
"The Secretary could reconsider this arbitrary line if forced to hear from low-income borrowers and defend his decision in negotiated rulemaking and notice-and-comment," it said.
Biden's Justice Department previously pushed back on these claims. People familiar with Biden's legal filing told reporters in a press call earlier this month that "the plaintiffs don't have standing to raise that procedural claim."
"The HEROES Act expressly exempts the Secretary's actions from notice-and-comment procedures. It doesn't have to do it. It just has to publish the action in the Federal Register," a person familiar said.
The person also said that with the plaintiffs' claim that the administration doesn't have authority under the HEROES Act to enact this relief, the court wouldn't be able to address that injury, invalidating their standing.
The debt-relief plan demonstrates "gross over-inclusiveness"
Leading up to the announcement of Biden's debt relief, many advocates and Democratic lawmakers were urging him to make the relief as expansive as possible, without any thresholds. Still, to avoid criticism that if he made the relief completely universal, the highest earners would benefit most, he placed income caps on the relief.
Nonetheless, the Job Creators Network argued his plan exhibits "gross over-inclusiveness" under the HEROES Act.
"Nothing in the Act's text or history indicates that Congress authorized the Secretary to cancel student-loan debts, let alone for tens of millions of borrowers at a cost of $400 billion," the legal filing said.
"And because a 'national emergency' is simply 'a national emergency declared by the President,' nothing would stop the next Administration from identifying other 'emergencies' (say, income inequality, climate change, the war on drugs, or even the student debt crisis) to justify any amount of debt cancellation," it added.
The filing said that not every borrower who would receive relief would be at risk of default or delinquency on their loans, and therefore, they wouldn't need this type of pandemic relief. But the White House has been clear that the economic impacts of the pandemic are long-lasting.
After Biden announced the emergency declaration for COVID-19 will end in May, an administration official told Insider in a statement that the debt relief will still be necessary, and legal.
"There was a national emergency that impacted millions of student borrowers," the official said. "Many of those borrowers still face risk of default on their student loans due to that emergency. Congress gave the Secretary of Education the authority under the HEROES Act to take steps to prevent that harm, and he is."
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