Six states, Missouri, Nebraska, Arkansas, Kansas, Iowa, and South Carolina, argue in their brief that the Joe Biden administration has overstepped authority. This was by moving to cancel dollars 20,000 in student debt for a huge number of Americans without authorization from Congress.
The Challenge to Biden’s Student Loan Plan
The Biden administration pointed out it is acting within the law. It said that the Heroes Act of 2003 allows the U.S. secretary of Education to make necessary changes to the federal student loan system in national emergencies. But, the states counter that the Heroes Act allows the Education secretary to change the federal student loan system to only keep some borrowers from being in a worse-off condition with their loans because of a national emergency. Now, they say, the president’s plan places an estimated 43 million Americans in a far better position. This is done by eliminating all loan balances for about 20 million and erasing $ 20,000 for over 20 million. This exceeds the authority of the Secretary that is under the Act. Mark Kantrowitz (higher education expert) said that the states assert that Joe Biden is using Covid as an excuse to forward his plan.
The states equally argue that Joe Biden’s plan will cause financial harm to the states. This shall include a loss of profits for many companies that service federal student loans.
Are some borrowers deprived of procedural rights?
A conservative advocacy organization, Job Creators Network Foundation, had brought the 2nd legal challenge to the Supreme Court. Here, the lawyers argue that two plaintiffs, Alexander Taylor, and Myra Brown, were deprived of their “procedural rights.” This is because it did not allow the public to weigh in on the shape of the student loan forgiveness plan. So, the lawyers said that Brown and Taylor are fully or partially excluded from the relief.
The Heroes Act, here, exempts the requirement for a notice-and-comment period in national emergencies. However, the plaintiffs in the challenge argue that the law does not authorize the president’s plan.
The U.S. Department of Justice and the lawyers for the Education Department argued- the challenges to the plan that the parties brought have failed to show any harm from the policy. This was typically a requirement to establish so-called legal standing.
The attorneys further denied the claim that the Joe Biden administration was overstepping its authority. It argued that it is within the law under the Heroes Act of 2003.