A lawsuit attempting to block President Biden’s student debt relief program was filed in the U.S. District Court, Southern District of Indiana, on Tuesday, September 27, 2022.
President Biden, through the U.S. Department of Education, plans to cancel $10,000 to $20,000 in student loans “for all borrowers with [Department of Education]-owned loans and annual income ‘during the pandemic’ less than $125,000 (or $250,000 for households).” The Department of Education estimates that about 40 million borrowers will benefit from this plan. The fact sheet released with President Biden’s plan states that “[n]early 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education.” Most borrowers, however, will have to apply for President Biden’s debt relief program. To support this plan, the Department of Education has cited the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, claiming that the act provides the Secretary of Education with relevant legal authority to cancel student debt.
Frank Garrison, the plaintiff in the lawsuit, is an employee of Pacific Legal Foundation, a “non-profit organization in a position that qualifies him for the Congressionally authorized Public Service Loan Forgiveness program.” Garrison paid for college using federal student loans and received a Pell Grant. Garrison utilizes both the Public Service Loan Forgiveness program and an income-driven repayment plan to pay off his student loans. As a Pell Grant recipient, Garrison qualifies for $20,000 in loan cancellation under President Biden’s plan. Because Garrison’s income data is filed with the Department of Education to maintain his income-driven repayment plan, $20,000 will automatically be canceled from Garrison’s debt. According to Indiana law, when $20,000 is automatically canceled from Garrison’s debt, “he will face a state income tax liability of more than $1,000 for 2022.” The complaint states that “Garrison would not incur that state tax liability if not for the Department’s automatic cancellation of a portion of his federal student loan debt” and, thus, “Garrison will incur a financial obligation that he would not otherwise have faced.”
The complaint states causes of action for violation of the Administrative Procedure Act, 5 U.S.C. § 706(2) and violation of the U.S. Constitution’s non-delegation doctrine and separation of powers. The complaint seeks relief in the form of an injunction prohibiting the Department of Education from enacting loan cancellation, a declaratory judgment “holding unlawful and setting aside any action by [the Department of Education] to enact loan cancellation,” a declaratory judgment and permanent injunction “declaring the delegations in 20 U.S.C. § 1098bb(a)(1) invalid,” and attorneys’ fees and costs.
Lawsuit aims to stop Biden’s student loan forgiveness plan, The Washington Post (September 27, 2022)
Garrison v. U.S. Department of Education et al (Case No. 1:2022cv01895)
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