A federal judge strikes down another conservative lawsuit against Biden's student-debt cancellation — but says a future administration could collect on the forgiven loans
A Wisconsin conservative group filed a suit against President Joe Biden's student-loan forgiveness.
Two days later, a federal judge dismissed the case and said the group lacked standing.
But he said there was a chance another administration could reinstate loans forgiven under Biden.
A conservative lawsuit against President Joe Biden's student-loan forgiveness rose and fell in the span of two days.
On Tuesday, the Wisconsin Institute for Law and Liberty — a conservative law firm — filed a federal lawsuit on behalf of the Brown County Taxpayers Association challenging Biden's $20,000 student-debt-relief plan. The group argued that the broad loan forgiveness had an "improper racial motive" by intentionally helping Black borrowers. It added that it violated the constitutional right of separation of powers by carrying out the relief without congressional approval.
A federal judge struck the case down on Thursday. In a court filing, the judge wrote that the group lacked standing with their arguments and dismissed the case. But he did say: "A substantial question remains as to whether Plaintiff can demonstrate that it will suffer irreparable harm."
"If, as Plaintiff alleges, the executive branch lacks all authority to void student debts in the manner proposed, Defendants' action may be void or voidable," the judge wrote. "If that is so, a future administration may not be bound by such actions and may seek to collect the purportedly forgiven debts."
The judge was referring to the HEROES Act of 2003. Biden's administration says it has the authority to enact one-time relief under that act, which gives the education secretary the power to waive or modify student-loan balances in connection with a national emergency, like COVID-19. But the Wisconsin Institute for Law and Liberty — and other conservative groups and lawmakers — have said the debt cancellation is an overreach of that authority.
Since the organization lacks standing, the issue of authority cannot be decided, the judge said, but "those seeking to take advantage of the program, however, may wish to consider this possibility before placing undue reliance on the benefits promised."
This is the second major lawsuit a judge has struck down that's pushed back on Biden's debt relief. The first one, filed by an Indiana attorney who argued the relief would result in a higher tax bill, was dismissed because the administration clarified that borrowers could choose to opt out of the policy.
Next week, a federal judge is expected to hear oral arguments on a lawsuit filed by six Republican-led states who say the loan forgiveness will hurt their states' tax revenues, along with operations of the student-loan company MOHELA in Missouri, where the suit was filed.
That case may decide whether Biden's plan will be paused, and the judge already said that no student debt would be canceled before October 17.
For now, the Education Department is telling borrowers to prepare for a student-loan-forgiveness application that will become available this month and that it will be "short and simple" and not require any uploading of documents to verify income.
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