Biden Admin Sued Over Student Loan Bailout

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By Steve Wilson (The Center Square)

A Louisiana attorney, assisted by a local policy group, is suing President Joe Biden over his student loan forgiveness plan.

The lawsuit, filed by Tommy Badeaux in the U.S. District Court for the Eastern District of Louisiana in New Orleans with the Pelican Center for Justice and the Pelican Institute for Public Policy, accuses the administration of forgoing the separation of powers required by the U.S. Constitution by forgiving billions in outstanding student loan debt without action from Congress.

The lawsuit says that the Higher Education Relief Opportunities for Students Act of 2003, which was intended to provide student loan relief connected with military members involved in the Global War on Terror, was not intended to provide wholesale debt relief. It also says that there was no public comment period, which is required after any preliminary regulatory action is posted in the Federal Register under the U.S. Administrative Procedures Act.

The attorneys in the case say that even though there have been several lawsuits filed against the Biden administration’s action on student loans on different grounds, their argument has an important legal combination on both the constitutional question and the Administrative Procedures Act.

“We believe very strongly in the legal argument for making both on the Administrative Procedure Act grounds and the constitutional grounds,” said James Baehr, the founder and special counsel for the Pelican Center for Justice. “Some of the other cases haven’t focused as much on the constitutional grounds or as much on the administrative procedure grounds and I think that ours accomplishes both.”

Badeaux is seeking a judgment setting aside the Biden loan forgiveness plan, a declaratory judgement that declares the debt cancellation unconstitutional and that his rights under the U.S. Administrative Procedures Act were violated, an injunction prohibiting the Biden administration from enacting its student loan debt cancellation policy and attorneys’ fees.

The lawsuit also cites a memo from then-General Counsel of the U.S. Department of Education, Reed Rubenstein, which said in January 2021 that the Secretary of Education didn’t have the “statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify the repayment amounts or terms thereof, whether due to the COVID-19 pandemic or for any other reason.”

The lawsuit also cites statements by House Speaker Nancy Pelosi, D-Ca., and President-Elect Biden that both agreed that action by Congress was required to forgive or amend student debt obligations.

“The Supreme Court likes to say that we don’t hide elephants in mouse holes, meaning that whenever someone, whatever branch of government, is granted with authority to act, we don’t hide it there. We want it to be obvious,” Pelican Institute General Counsel Sarah Harbison said. “It’s an important part of the separation of powers. And just like with the OSHA vaccine mandate lawsuit and with the Head Start vaccine and masking mandate, the administration pointed to obscure rules in OSHA and in the Head Start program, that has to do with air quality for example.”

Badeaux’s lawsuit won’t be the first time the Biden administration’s student loan debt cancellation plan was challenged in court. The program is on hold after the 8th U.S. Circuit Court of Appeals applied a temporary injunction on Oct. 21 after a lower court ruled against six state attorneys generals who sued to stop the plan.

“Kudos to Tommy, it’s a hard thing to stand up and sue the government,” Pelican Institute CEO Daniel Erspamer said. “But when they do wrong, when they don’t follow the rules, when, you know, certainly even as you notice, the president said this should go through Congress. Somebody has to stand up and say, ‘This isn’t right.’”

Syndicated with permission from The Center Square.

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2 3 minutes read