Conservative law firm files suit to stop student loan forgiveness, cites closing ‘racial wealth gap’ as unjust

The lawsuit quotes a White House fact sheet that claims Black students and their families are more likely to borrow for school and to take out larger loans.

More than 45 million Americans are in debt due to student loans. While many are likely thrilled about President Joe Biden’s loan forgiveness plan, a conservative Wisconsin law firm has joined the opposition, saying the initiative is discriminatory and unconstitutional.

According to Madison.com, the conservative Wisconsin Institute for Law and Liberty, representing the Brown County Taxpayers Association, filed a federal lawsuit on Oct. 4. The suit contends that because Biden’s proposal aims to “narrow the racial wealth gap” and aid Black borrowers, it is discriminatory and involves taxation without representation. The lawsuit requests that the judge immediately halt any student debt forgiveness while the case is being heard in court.

“It simply can’t be the case that a president, Republican or Democrat, can create law, can make a spending program out of whole cloth without being called to the carpet and (having) to defend its constitutionality,” said Rick Esenberg, the institute’s president, Wisconsin Public Radio (WPR) reported.

Student loan forgiveness
President Joe Biden (left) spoke about the plan for student loan forgiveness at a White House briefing in August. Education Secretary Miguel Cardona, who was at his side, was named along with Biden in a lawsuit filed this week in federal court in Wisconsin that seeks to block the plan from being implemented. (AP Photo/Evan Vucci, File)

Madison.com reported that the Department of Education estimates the cost of canceling student loans will top $300 billion over the next 10 years. However, a study by the University of Pennsylvania cited in the Wisconsin lawsuit estimates a cost of up to $519 billion, and perhaps over $1 trillion once all details are disclosed.

According to WPR, while there are no racial requirements for loan eligibility, the lawsuit quotes a White House fact sheet that claims Black students and their families are more likely to borrow for school and to take out larger loans, and that Black students and other students of color are more likely to qualify for Pell Grants, which are income-based.

Scot Ross, a Democratic strategist, rejected the argument raised by plaintiffs in the lawsuit. “This is so obnoxious for them to try and claim that the law is somehow the law because there are more student loan borrowers who may be African American, that this is somehow a violation of the equal protection clause,” he said, according to WPR. “The fact is that student loan borrowers are hardworking. They did the right thing. They took on the responsibility for financing their higher education. They are simply asking to be treated fairly in a system that treats them unfairly.”

Biden’s one-time loan forgiveness proposal has income restrictions for low- and middle-income families. Students who obtained a Pell Grant can receive up to $20,000 in debt reduction, and students who did not can receive up to $10,000. The Biden administration said applications will open in October and remain open through the end of 2023, according to WPR.

Additionally, the administration is extending the pause on student loan debt payments for a final time through Dec. 31, theGrio previously reported.

WPR reported that a White House official claimed in a statement that the government acted within its legal boundaries to offer working- and middle-class families some breathing room.

“Republican officials are standing with special interests to try to keep millions of borrowers under mountains of unmanageable student loan debt,” the statement said.

Student loan forgiveness
After the Biden administration extended a pause in student loan repayments, borrowers and the Too Much Talent Band gathered outside the White House in January to thank President Joe Biden and Vice President Kamala Harris and demand that they cancel student debt. The announcement later of a loan forgiveness plan drew lawsuits, including one this week in Wisconsin. (Photo by Paul Morigi/Getty Images for We, The 45 Million)

According to Madison.com, White House press secretary Karine Jean-Pierre called Republicans’ resistance to the plan shameful during a briefing on Tuesday.

“It’s a shame that you have Republicans out there — Republican groups, Republican states that are trying to stop Americans from getting a little bit of a breathing room,” she said. “We’re talking about 40 million Americans that could benefit from getting student loan relief. It is shameful that they are siding with the special interests. It is shameful that they are not siding with the American people on this.”

In addition to Biden, the lawsuit also names Education Secretary Miguel Cardona, the Department of Education, the Office of Federal Student Aid, and its top operating officer.

The HEROES Act, passed in the wake of the 9/11 attacks and resulting in an American-led military fight against terrorism, allowed Biden to implement the debt reduction program. It gives the executive branch the power to discharge the student loan debt of people taking part in military operations or assisting with national emergencies.

In its complaint, the Wisconsin lawsuit alleges that the president overreached by inappropriately avoiding Congress and also by citing COVID-19 as a reason to invoke the HEROES Act.

“The president has no authority to order a wholesale forgiveness of student loans, costing taxpayers up to a trillion dollars,” Esenburg said, according to Madison.com. “Whether this plan is good for America is for Congress to decide.”

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