By Enyichukwu Enemanna
In reaction to the cancellation of student loan recently announced by President Joe Biden’s administration in the United States, Conservative group Pacific Legal Foundation on Tuesday filed a federal lawsuit against the US Department of Education.
The legal action was instituted before the US District Court for the South District of Indiana.
This comes barely 24 hours after the Congressional Budget Office (CBO) announced that Biden’s plan to cancel some student loan debt will cost $400 billion.
“Congress did not authorize the executive branch to unilaterally cancel student debt,” said Caleb Kruckenberg, an attorney at Pacific Legal Foundation. “It’s flagrantly illegal for the executive branch to create a $500 billion program by press release, and without statutory authority or even the basic notice and comment procedure for new regulations.”
Biden said in August that the US Government will forgive $10,000 in student loans for millions of debt-saddled former college students, keeping a pledge he made in the 2020 campaign for the White House.
Critics of the plan raised concerns over its inflationary impact while the White House said the plan was fiscally justified because the federal deficit was on track for a $1.7 trillion reduction for fiscal 2022 compared with the prior year.
The Education Department did not immediately respond to a request for comment.
As of June 30, 43 million borrowers held $1.6 trillion in federal student loans. About $430 billion of that debt will be canceled, the CBO estimated. The CBO previously projected that some of the funds canceled by Biden’s action would eventually have been forgiven anyway.
“It (Biden’s plan) will only lead to more calls for government intervention in education at taxpayers’ expense,” said Steve Simpson, another attorney at Pacific Legal Foundation.