Case Name: BCTA v. Biden
Type of Case: Equality Under the Law
Court: United States District Court for the Eastern District of Wisconsin in Green Bay
Filed On: October 19, 2022
Current Status: Victory! On June 30, 2023, the United States Supreme Court struck down President Biden’s Student Loan Forgiveness Program. The Court decided that federal law does not give the president the power to rewrite federal law and cancel hundreds of billions in federal student loans. The Court found that Biden’s plan implicated the “major questions doctrine,” which was the same argument raised by the Brown County Taxpayers Association in its case. BCTA filed the first lawsuit that made its way all the way to the Supreme Court, but was unable to obtain an injunction. After the State of Nebraska obtained an injunction a few days later, BCTA dismissed its lawsuit at the Seventh Circuit Court of Appeals. Though the case did not succeed, the issue did, and WILL congratulates BCTA for standing up for the rule of law and taxpayers all around the United States.
WILL, TAXPAYERS SUE THE BIDEN ADMINISTRATION OVER STUDENT LOAN DEBT FORGIVENESS
October 4, 2022 | Attorneys at WILL filed a federal lawsuit, challenging the new federal student debt forgiveness program.
WILL APPEALS TO THE SEVENTH CIRCUIT ON BIDEN STUDENT LOAN DEBT FORGIVENESS LAWSUIT
October 11, 2022 | On behalf of the Brown County Taxpayers Association (BCTA), attorneys at WILL filed an emergency motion for an injunction with the United States Court of Appeals for the Seventh Circuit, arguing that the President cannot spend trillions of taxpayer dollars without authorization from Congress.
WILL ASKS SCOTUS TO STOP THE BIDEN STUDENT LOAN FORGIVENESS PLAN
October 19, 2022 | Attorneys at WILL asked the United States Supreme Court to temporarily pause the Biden Administration’s student loan forgiveness program, which is expected to start this Sunday.
The Lawsuit: The United States Constitution grants Congress the power to tax and spend. The President may only act through laws passed by Congress, and all federal spending must be through appropriations. President Biden’s plan short circuits this critical check and allows the Executive Branch to appropriate perhaps over $1 Trillion without Congressional input. That violates our separation of powers. What’s more, the Constitution forbids the government from engaging in race discrimination. Here, President Biden announced an explicit racial motivation in creating this program. According to the White House, the Student Debt Relief Plan is motivated by a desire to “advance racial equity” and “narrow the racial wealth gap.” To achieve equity, the plan, according to the White House, is “more likely” to help “Black students,” “Black borrowers,” and “other borrowers of color.” The White House favorably cited the Urban Institute, which claims that Defendants’ chosen student loan forgiveness plan will “disproportionately benefit Black borrowers” and would be “far more racially progressive than broad forgiveness.” This is unconstitutional race discrimination.
Background: The U.S. Department of Education, through various federal laws, holds a portfolio of student loans amounting to approximately $1,617,300,000,000 ($1.6 Trillion). This portfolio includes Direct Loans, Federal Family Education Loans, and Perkins loans with outstanding balances, and defaulted loans under a variety of programs.
Under the “One-Time Student Loan Debt Relief Plan,” Defendants will forgive up to $20,000 to federal Pell Grant recipients and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers with loans held by the Department of Education are eligible if their individual income is less than $125,000 or $250,000 for households. The plan will benefit “up to 43 million borrowers, including canceling the full remaining balance for roughly 20 million borrowers.” This program is also racially motivated, as the Student Debt Relief Plan is “more likely” to help students and borrowers of color.
The Biden Administration, U.S. Department of Education, and Office of Federal Student Aid alleges that this new tuition loan forgiveness program is authorized under the 9/11-era HEROES Act. But this was a law designed to help the men and women of the Armed Services, allowing the President to make specific changes to student loan programs when “necessary in connection with a war or other military operation or national emergency” (20 U.S.C. § 1098bb(b)(1)). The President is abusing this law by claiming that all Americans are in a state of emergency because of COVID-19, even though he recently declared that the pandemic was over. And as confirmed by the two preceding administrations, the HEROES Act does not allow the President to unilaterally forgive student loans.