Judge Throws Out Wisconsin Group’s Suit Over Student Loan Forgiveness

Following President Joe Biden’s announcement that millions of student loan borrowers would have up to $20,000 of debt wiped out, a wide range of critics began speaking out against what they saw as an executive overreach.

For its part, the Brown County Taxpayers Association in Wisconsin filed a lawsuit claiming that the plan was unconstitutional. The group’s president cited the 5th Amendment and the Constitution’s separation of powers in making the argument that the student loan debt amnesty should be overturned.

Rich Heidel wrote that Biden’s proposal “takes from one group of people and arbitrarily distributes the spoils to another group,” adding that it “amounts to nothing more than a modern-day version of King George III’s Stamp Act where there was massive taxing and spending without participation of the people’s representatives.”

According to the association’s lawsuit, American taxpayers will be “on the hook” to fund the program by paying “more in taxes to support a federal treasury that will be over $1 trillion smaller thanks to defendants’ unlawful program.”

Although a number of other groups and experts have similarly argued that the plan violates the Constitution, U.S. District Judge William Griesbach determined that the group does not have standing to argue its case.

As a result, he dismissed the case, writing in his ruling that “even if plaintiff did have standing, it is unclear that the preliminary relief plaintiff seeks would be appropriate.”

The judge concluded that there remains a “substantial question” regarding “whether plaintiff can demonstrate that it will suffer irreparable harm” as a result of the debt write-off.

Six GOP-led states also filed a lawsuit challenging Biden’s plan, arguing that it is “not remotely tailored to address the effects of the pandemic on federal student loan borrowers.”

Arkansas Attorney General Leslie Rutledge, who has spearheaded the effort, determined: “The president does not have the authority to put himself in the place of Congress. These actions must be taken by Congress and he can’t override that.”

Late last month, the Biden administration did appear to acknowledge that certain aspects of the criticism against his plan are valid.

The Department of Education reversed its early position that government-backed loans by private lenders — through a defunct program called Family Federal Education Loan — would be included in the plan.

“As of Sept. 29, 2022, borrowers with federal student loans not held by ED [the U.S. Department of Education] cannot obtain one-time debt relief by consolidating those loans into Direct Loans,” the agency advised.