The suit claims that under the new scheme, it “will outright cancel a massive amount of debt owed to the Treasury” and will do so under capricious and illegal means.
Two think tanks have come together to file a lawsuit against the Biden Administration's plan to cancel $39 billion worth of student loans. The legal action comes after Biden's larger plan was stopped by the Supreme Court in June.
The Michigan lawsuit was filed by the New Civil Liberties Alliance (NCLA) on behalf of the Cato Institute and the Mackinac Center for Public Policy. The suit comes against the redesigned student loan cancellation plan of $39 billion versus the plan canceling $430 billion struck down by the Supreme Court.
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View on RumbleThe groups are alleging that the Biden Administration is overstepping its executive power in canceling the student loans of 800,000 people.
The NCAL released a statement about the suit saying its purpose is to "stop President Biden’s utter disregard for federal law and the Constitution" in his action of canceling student debt.
The administration moved at an "accelerated schedule to deter court review" of the new, smaller proposal to cancel loans, according to the NCLA.
Litigation Council Shen Li of the NCLA said that in the case of $430 billion, the Department of Education had a "brazen attempt to pull a billion-dollar ‘elephant’ out of a statutory ‘mousehole.’" However, this time around, "the Department’s loan-cancellation scheme does not even pretend to have a statutory ‘mousehole.’"
The suit claims that under the new scheme, it "will outright cancel a massive amount of debt owed to the Treasury" and will do so under capricious and illegal means.
"Despite its massive expense and impact on the legal rights and obligations of millions of borrowers, the Department did not promulgate this policy through mandatory notice-and-comment and negotiated rulemaking procedures," the suit continues. "Instead, it used a press release that neither identified the policy’s legal authority nor considered its exorbitant price tag."
After the Supreme Court struck down the $430 billion plan, Biden said in response to the decision that he would pursue a "new path consistent with [the] ruling to provide student debt relief to as many borrowers as possible as quickly as possible" and said the court "misinterpreted the Constitution."
The suit alleges the Biden Administration, with the new plan, is in violation of the Constitution's Appropriations Clause of Article I, section nine.
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