A new lawsuit from a small business group seeks to block Biden’s student debt relief plan

WASHINGTON (AP) — A small business advocacy group has filed a new lawsuit to block the Biden administration’s efforts to forgive tens of millions of Americans’ student loan debt — the program’s latest legal challenge.

The suit, filed Monday by the Entrepreneurs’ Network Foundation, argues that the Biden administration violated federal procedures by not seeking public comment on the program. It’s one of a handful of lawsuits filed by conservative business groups, lawyers and Republican lawmakers in recent weeks as the Biden administration tries to advance its plan to cancel billions in debt ahead of November’s midterm elections.

Read more: How to pay off student loans during the pandemic

Elaine Parker, president of the Entrepreneurs’ Network Foundation, spoke out against the program as an executive, complaining that it would do nothing to address the “obnoxious increase in college tuition that outpaces inflation every year,” a major cause of rising debt.

“Because of the breadth of the program, this bailout applies to everyone in this country,” she said. “And everyone should have the opportunity to present their ideas to the government.” “These universities should be held accountable for this student debt crisis,” she added.

The Entrepreneurs Network Foundation has previously turned to the courts to block the Biden administration’s Covid-19 vaccine mandate on businesses. He sued Major League Baseball for moving the All-Star Game out of Atlanta because of changes to Georgia’s voting rules. That lawsuit, citing losses to local businesses, was later dropped.

The new lawsuit is among legal challenges trying to stop President Joe Biden’s proposal in late August to cancel up to $20,000 in debt for certain borrowers.

Six Republican-led states filed suit late last month, alleging the Biden administration overstepped its executive authority, as did the Pacific Legal Foundation, a Sacramento, Calif.-based legal advocacy group. The suit, filed in federal court in Indiana, alleges the plan is an illegal attack that increases state tax burdens on Americans who receive debt forgiveness.

Meanwhile, a federal judge in Wisconsin last week dismissed a lawsuit from a local taxpayers’ group, the Brown County Taxpayers Association, to block the program, ruling that the group had no standing to file the lawsuit. The group argued that Biden’s order illegally overrides Congress’ authority over spending and that the plan is discriminatory because it seeks to provide special relief to borrowers of color.

The latest lawsuit filed in the U.S. District Court for the Northern District of Texas against the U.S. Department of Education and its secretary, Miguel Cardona, is about how the plan was designed. The Biden administration has violated the notice and comment procedures of the Administrative Procedure Act. He also challenges the administration’s legal justification for the program.

The suit includes two plaintiffs: the plan was ineligible for debt forgiveness because the plan included outstanding business loans, and the one who didn’t receive a Pell grant and was entitled to less debt forgiveness under the plan.

“Behind closed doors, the Department announced a new debt forgiveness program that would affect tens of millions of Americans and cost hundreds of billions of dollars,” the lawsuit reads. “Instead of issuing notices and soliciting public input, the department is keeping key details of the program secret and hoping to get debt relief in time for the November election.”

He alleged that the department “made many arbitrary decisions about the program, including which individuals would receive debt forgiveness, how much debt would be forgiven, and what types of debt would qualify for the program.”

“The result of this randomness is predictable: some will use it well, some will improve, and others will be abandoned entirely,” he says.

The case was assigned to U.S. District Judge Reed O’Connor, who ruled in 2018 that the Affordable Care Act was unconstitutional. The Supreme Court reversed the decision last year. O’Connor, an appointee of former President George W. Bush, has ruled on other policies pursued by Democratic administrations. Last month, it ruled that an ACA provision requiring HIV prevention drug coverage violates a Texas employer’s religious beliefs.

The civil lawsuits filed in federal court in Fort Worth have a 90% chance that either O’Connor or Judge Mark Pittman, an appointee of former President Donald Trump, will go.

White House spokesman Abdullah Hassan issued a statement opposing the loan forgiveness program.

Read more: Biden’s debt cancellation plan targeted by libertarian group lawsuit

“As opponents of our plan drive special interests to keep millions of middle-class Americans in debt, the president and administration are struggling to give middle-class families some breathing room as they recover from the pandemic. And prepare to resume loan payments in January,” he said in a statement.

Biden’s debt forgiveness program will erase $10,000 in student loan debt for individuals making less than $125,000 a year or families making less than $250,000. Typically, Pell grant recipients who demonstrate greater financial need qualify for an additional $10,000.

The Biden administration used an act passed after the September 11, 2001, terrorist attacks as legal justification for the program. In an August legal opinion, the Justice Department said the law would give the administration “clear authority” to reduce or eliminate student debt. The administration has cited the Covid-19 outbreak as an emergency.

The Congressional Budget Office estimates the program will cost taxpayers $400 billion over the next three decades.

Associated Press writers Seung Min Kim and Mark Sherman contributed to this report.

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