Judge dismisses Wisconsin student-debt-forgiveness lawsuit, says loans may resume

  • A Wisconsin conservative group filed a lawsuit challenging President Joe Biden’s student loan ban.
  • Two days later, a federal judge dismissed the case, saying the group lacked standing.
  • But he said there was a possibility another Biden administration could reintroduce loans that had been made.

A Conservative lawsuit against President Joe Biden’s student loan waiver rose and fell in the space of two days.

On Tuesday, the Wisconsin Institute for Law and Liberty — a conservative law firm — filed a federal lawsuit on behalf of the Brown County Taxpayers Association against Biden’s $20,000 student debt relief plan. The group argued that the broad loan waiver had an “undue racial motive” in intentionally helping black borrowers. It added that it violated the constitutional right to separation of powers by conducting the relief without congressional approval.

A federal judge dropped the case on Thursday. In a court filing, the judge wrote that the group was not steadfast in its arguments and dismissed the case. But he said: “A key question remains whether the plaintiff can show that he will suffer irreparable harm.”

“If, as plaintiff alleges, the executive branch does not have the authority to void student debt in the manner proposed, the defendants’ complaint may be void or voidable,” the judge wrote. “If so, a future administration may not be bound by such measures and may seek to collect the allegedly forgiven debt.”

The judge was referring to the HEROES Act of 2003. Biden’s government says it has the power to issue a one-time relief under that act, which gives the Secretary of Education the power to waive or amend student loan balances in connection with a national emergency . like COVID-19. But the Wisconsin Institute for Law and Liberty — and other conservative groups and lawmakers — have said the debt forgiveness is an overstatement by that agency.

Because the organization lacks reputation, the question of authority cannot be decided, the judge said, but “those who wish to take advantage of the program should consider this possibility before unduly relying on the promised benefits.”

This is the second major lawsuit a judge has struck down that has pushed back Biden’s debt forgiveness. The first, filed by an Indiana attorney who argued the relief would result in a higher tax bill, was dismissed because the administration made it clear that borrowers could choose to opt out of the policy.

Next week, a federal judge is expected to hear oral arguments on a lawsuit by six Republican-led states that say the loan forgiveness will hurt their states’ tax revenues, along with the operations of student loan company MOHELA in Missouri, where the lawsuit was filed.

That case could decide whether Biden’s plan is suspended, and the judge has already said no student debt would be forgiven until October 17.

For now, the Department of Education is telling borrowers to prepare for a student loan forgiveness application, which will be available this month, and that it will be “short and simple” and will not require uploading any income verification documents.

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