Other influential conservatives — including Sen. Ted Cruz (R-Tex.) and allies at the Heritage Foundation, a conservative think tank — are weighing their own options as they criticize the government’s debt relief plan. Biden, two other people familiar with the matter said. And a conservative advocacy group founded by a major Trump donor said it would take legal action against the policy.
“Conservative public interest law firms across our network are considering filing lawsuits against this. They do background legal research, trying to figure out who might be the most suitable clients for them,” said John Malcolm, director of the Meese Center at the Heritage Foundation, in an interview. “They have to find a client with the standing and the guts to take legal action. There are several groups in our network that are exploring this right now. »
All sources warned that no decision had been made – and as of Thursday morning no lawsuit appeared to have been filed. But a legal battle could have dire financial consequences for millions of student borrowers, who rejoiced last week after Democrats delivered on their long-standing promise to erase some of their debt.
The potential litigation also raises the prospect of a broader court battle and setting a precedent over the extent of the president’s economic authority. Such a lawsuit could reach the Supreme Court, pushing it back into the spotlight after infuriating Democrats by stripping abortion protections and limit the power of the Environmental Protection Agency to respond to climate change.
Under Biden’s plan, announced last week, the government is set to forgive up to $10,000 of federal college debt — or $20,000 if borrowers also received Pell Grants, which typically go to low-income students. Although the plan is less generous than some members of the Democratic Party initially sought, it still marks a major financial benefit for many debtors – some of whom have expressed horror at the prospect of losing the aid even before it does not happen.
“That would be terrible,” said Michael Loomus, 31, who works as a call center supervisor in Ohio, referring to the prospect of the courts blocking Biden’s plan. Loomus has struggled to repay his $11,400 in student loans since dropping out of the University of Toledo, but most of his debt would be wiped out by the president’s plan.
“It just seems like they’re continually trying to keep borrowers in debt,” Loomus added. “I don’t make a lot of money…and before that I felt like I would never repay my loans.”
The Biden administration has been adamant that its policy is legal. The Ministry of Justice published a 25-page note last week, justifying debt cancellation as “appropriate” under a 2003 law giving the executive broad power to review student loan programs. This law was passed in the wake of the September 11, 2001, terrorist attacks and gave the president the power to write off student debt in relation to national emergencies — which the White House says includes the ongoing pandemic.
“The legality is very, very strong… The language of the Heroes Act is that in the event of a national emergency, the president can take action that includes suspension or cancellation of debt,” Laurence Tribe said. , a Harvard law professor close to the Biden administration.
The White House did not immediately respond to a request for comment Wednesday night. Bharat Ramamurti, deputy director of the White House National Economic Council, pointed out to reporters last week that Biden was using the same authority the Trump administration had invoked to extend a pause on student loan payments earlier in the pandemic. “It hasn’t been challenged in court. It hasn’t been found to be abusive by any court. It’s the same statute that the previous administration used and that we used, that we’re using now for this action. said Ramamurti.
He added: “We believe we are on a solid legal footing.”
Spokespersons for the attorneys general of Arizona, Missouri and Texas did not respond to requests for comment. The most recent talks between GOP attorneys general and their staff took place on Wednesday, the person familiar with the matter said.
Conservatives have called the debt cancellation plan irresponsible and fiscally unfair to the millions of Americans who have never attended college or who have already paid off their student loans. Republicans have also said the plan is illegal because it wrests spending powers from Congress, arguing that the 2003 law was never intended to give the executive branch such broad and unilateral authority.
Cruz, who ran for president in 2020, has become a leading critic of the GOP plan, but acknowledged in a radio interview published Wednesday that it’s still unclear who will get the ” legal standing – or cause to challenge the decision – in court. A spokesperson for Cruz declined to comment, referring a reporter to Cruz’s comments in this interview.
Cruz said the courts are unlikely to find an average taxpayer qualified to sue. It may be possible to find a plaintiff who has earned a little more than the amount needed to qualify for debt forgiveness, according to the senator, but it is “not at all clear that a court would accept this argument. “.
And Cruz added that a lawsuit could be filed by a current student who argues the debt forgiveness plan would lead colleges to raise tuition fees, unfairly subjecting students to higher fees.
“The difficulty here is finding a plaintiff who the courts will find has standing,” Cruz said. “It can be a real challenge.”
Yet the Tories rushed to find a plaintiff. The president of the Job Creators Network — founded by Bernie Marcus, a GOP donor who launched Home Depot — said Wednesday it was already building a legal team and working with outside advisers to prepare for a lawsuit.
“We’re taking this…we’re in the process of lining up our plaintiffs,” Jobs Creator Network CEO Alfredo Ortiz told Fox News recently. “As soon as they give all the details about it, we will take it to court.”
Separately, some legislators have considered their own intervention in such a case. Rep. Byron Donalds (R-Fla.) told The Washington Post he was exploring options to prosecute Biden over the policy.
Some independent legal experts say a legal challenge could prove successful. Jed Handelsman Shugerman, a professor at Fordham Law School, said the Justice Department memo justifying the policy because of the coronavirus did not match the nature of the general action or the way the White House put it. defended. In presenting the plan, Biden mainly talked about fixing a broken higher education system and placed less emphasis on offering emergency relief due to the pandemic.
Shugerman stressed that he supports canceling student debt and wants the administration to change its legal argument so it is not struck down by the Supreme Court.
“If they continue with that argument and that interpretation of the law, they’re likely to lose 6-to-3, and it’s possible they’ll lose by more than 6-to-3,” Shugerman said. Without a change in strategy from the administration, Shugerman said, “I anticipate that this good policy will be rightly overturned by the courts on a legal basis.”
Adam Minsky, a Boston lawyer who specializes in student debt issues, said it’s hard to predict exactly where the Supreme Court will rule on the issue, but the main legal issue is likely to be whether a plaintiff had standing to sue. Litigation could result in an emergency injunction ending the policy the moment it takes effect, he said, creating chaos for tens of millions of borrowers – possibly just before the mid-election. -mandate this fall.
“That would be a mess,” Minsky said. “Maybe there are enough judges saying they’ve gone too far.”