Judge dismisses lawsuit against Biden’s student loan forgiveness plan.
Federal Judge Dismisses Lawsuit Challenging Biden’s Student Loan Repayment Plan
A federal judge has dismissed a lawsuit filed by two conservative groups seeking to block the Biden administration’s new student loan forgiveness plan.”>student loan income-driven repayment (IDR) plan. U.S. District Judge Thomas Ludington of the Eastern District of Michigan issued an 18-page order on Aug. 14, dismissing the lawsuit without prejudice. The lawsuit was filed by the New Civil Liberties Alliance (NCLA) on behalf of the Cato Institute and Mackinac Center for Public Policy earlier this month.
Judge Ludington concluded that the lawsuit lacked standing and the groups did not demonstrate they would suffer injury by the administration’s student loan forgiveness plan.
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“Plaintiffs have not shown a redressable injury caused by Defendants,” the judge wrote. “But—even assuming that Plaintiffs’ alleged injury was sufficient—they have not adequately demonstrated a causal link between Defendants’ action and an identifiable injury.”
The judge also rejected the groups’ request to temporarily halt the administration’s plan.
In response to the ruling, Sheng Li, litigation counsel for NCLA, told media outlets in an email statement that the groups are reviewing their legal options.
“The district court did not rule on the merits of the case and instead said Cato and Mackinac were not the right parties to bring it,” Mr. Sheng stated. “We disagree with the court’s conclusion regarding legal standing and are reviewing legal options with our clients.”
President Joe Biden issued a statement celebrating the ruling.
“I’m proud that my Administration is delivering on that promise and has already approved over $116 billion in debt cancellation for 3.4 million Americans – no matter how many lawsuits, challenges, or roadblocks Republican elected officials or special interests put in our way,” President Biden said.
“As I announced earlier this summer in the wake of the Supreme Court’s decision on our student debt relief plan, we will continue to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” the president added. “We will use every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”
The court’s decision happened on the same day that the Department of Education began providing $39 billion in student loan forgiveness for borrowers.
“Today, the Biden-Harris Administration is beginning to discharge loans for 804,000 borrowers who never received the forgiveness they rightfully earned through decades of payments,” Education Secretary Miguel Cardona wrote on X, formerly known as Twitter, on Aug. 14. ”We are fighting for borrowers and fixing a broken student loan system.”
On July 14, the Biden administration announced a $39 billion student loan forgiveness plan for 804,000 borrowers, in a move to fix “administrative failures” that had held up relief for borrowed under IDR plans.
Weeks earlier, the Supreme Court voted 6–3 to strike down President Biden’s student debt relief program to provide as much as $20,000 for around 40 million borrowers.
On Aug. 4, NCLA filed the lawsuit in the U.S. District Court for the Eastern District of Michigan, arguing that the Department of Education “has no lawful authority” to carry out the student loan forgiveness plan.
“NCLA argues the U.S. Department of Education’s actions violate the Constitution’s Appropriations Clause, which grants Congress near-exclusive authority to
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