A federal judge dismissed a lawsuit filed by two conservative groups seeking to block the Biden administration’s new student loan income-driven repayment (IDR) plan.
Mr. 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.
“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.
“NCLA argues the U.S. Department of Education’s actions violate the Constitution’s Appropriations Clause, which grants Congress near-exclusive authority to cancel debt owed to the Treasury,” according to a press release.
“Canceling borrowers’ debt through this scheme would erase their incentive to participate in the Public Service Loan Forgiveness (PSLF) program by completing ten full years of work for qualified non-profit employers while making monthly payments,” the press release states. “The plan thus directly harms non-profit organizations that benefit from PSLF like Cato and the Mackinac Center and undermines Congress’ goals in enacting the PSLF program.”
