Lawsuit filed to stop Biden administration’s unlawful student loan cancellation

Indianapolis; September 27, 2022: Today, Pacific Legal Foundation filed suit against the U.S. Department of Education to block its illegal move to cancel more than $500 billion in student loan debt.

“Congress did not authorize the executive branch to unilaterally cancel student debt,” said Caleb Kruckenberg, an attorney at Pacific Legal Foundation. “It’s flagrantly illegal for the executive branch to create a $500 billion program by press release, and without statutory authority or even the basic notice and comment procedure for new regulations.”

In August 2022, President Biden announced his plan to cancel up to $20,000 in student loan debt per person for more than 40 million Americans. The Department of Education’s justification relies on an inapplicable, 20-year-old law: The HEROES Act, which was intended as aid to veterans and their families, allows government to modify student loans during times of war or national emergency.

Whatever the motives of the president for transferring massive amounts of student debt to taxpayers in a rushed, haphazard manner, it certainly seems like an election year ploy. That is one of the predictable effects of the president usurping Congress’ power to make law. Not since President Trump imposed a nationwide eviction moratorium before the 2020 elections has a president abused his power so profoundly.

“Cancelling student debt is unjust to those who have paid their loans or never took any. It will only lead to more calls for government intervention in education at taxpayers’ expense,” said Steve Simpson, senior attorney at Pacific Legal Foundation. “Loan cancellation will make Americans more divided, as those who paid their loans—or never went to college—will have good reason to think that we no longer have a government of, by, and for the people.”

Plaintiff Frank Garrison is a public interest attorney — now at Pacific Legal Foundation — who believes the rule of law and separation of powers are bulwarks for liberty and against centralized government power. As a part of an existing, congressionally authorized Public Service Loan Forgiveness (PSLF) program, he will receive debt forgiveness after making 10 years of payments on his loans. The challenged program will stick him with a new state tax bill which he would not have under his existing PSLF program.

For decades, Pacific Legal Foundation has fought for the constitutional separation of powers, the main structural protections against abuses of power that undermine freedom. PLF has won five separation of powers cases at the U.S. Supreme Court.

The case is Garrison v. U.S. Department of Education, filed in U.S. District Court for the Southern District of Indiana. PLF has filed a temporary restraining order to prevent the loan cancellation from going into effect.

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