White House slams Republican critics of student loan forgiveness

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Biden administration hits back at Republicans considering take legal action against President Joe Biden’s historic decision to cancel student debt for tens of millions of Americans.

A White House spokesman, Abdullah Hasan, accused the GOP of double standards that punish the middle class.

“Let’s be clear about what they would be trying to do here: the same people who voted for a $2 trillion tax giveaway for the rich and got hundreds of thousands of dollars of their own loan debt forgiven. to small businesses would try to keep millions of working middle-class Americans in mountains of debt,” Hasan told CNBC.

News of a potential challenge to entitlement to Biden’s student loan forgiveness plan, which would forgive up to $20,000 for millions of borrowers, comes as no surprise. Even before the president made his announcement, some Republicans were work to stop an effort to cancel the debt.

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Now, GOP attorneys general from states including Arizona, Missouri and Texas, along with Sen. Ted Cruz, R-Texas, and those linked to the conservative Heritage Foundation think tank, are considering their options to try to block the president’s plan.

This is sure to worry the tens of millions of Americans celebrating debt cancellation last week. A lengthy legal challenge would threaten to throw into limbo the debt fate of an estimated 43 million people for the foreseeable future.

The issue could go all the way to the Supreme Court.

Establishing “quality” for a lawsuit may not be easy

No legal action has yet been taken, and in a recent interview, Cruz recognized the challenges of bringing one. “As a general rule, simply being a taxpayer is not enough for the courts to find that you have standing to challenge an expenditure of funds,” he said during an appearance on “The Liz Wheeler Show. “.

“You have to find someone who was wronged by the spending of funds,” Cruz said.

Indeed, the first hurdle for those hoping to take legal action against Biden’s plan will be finding a suitable plaintiff, said Harvard law professor Laurence Tribe. It would probably have to be someone who could argue that student loan forgiveness is causing them “personal injury,” and that may not be easy.

“Such an injury is necessary to establish what the courts call ‘standing,'” Tribe said. “No individual, company or state is manifestly harmed as private lenders would have been if, for example, their student loans had been cancelled.”

President Biden announces student debt relief plan

The White House, along with its announcement, published a 25-page note by the US Department of Justice, arguing that debt forgiveness is “appropriate” under the Heroes Act of 2003, which grants the president broad powers to review student loan programs. This law was passed shortly after the terrorist attacks of September 11, 2001 and allowed the executive to cancel student loans in the event of a national emergency. The Trump administration declared the Covid-19 pandemic a national emergency in March 2020.

Opponents trying to block the pardon will likely argue that the Heroes Act doesn’t give the president the power to write off student debt in the broad way he’s trying to do, said higher education expert Mark Kantrowitz. .

What a legal challenge means for borrowers

The U.S. Department of Education said its loan forgiveness application would be available by October or earlier, and Kantrowitz said borrowers shouldn’t change their plans just yet.

“Borrowers should apologize and be cautiously optimistic,” he said.

That said, he advised that it would be wise not to make big financial changes expecting to see student loan balances decline in the short term.

“Even if a legal challenge fails to block the president’s plan, it will likely cause delays in implementing the loan forgiveness,” Kantrowitz said during an appearance on CNBC’s Twitter Spaces on Friday.

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