(The Center Square) – A group of 23 attorneys general led by Missouri and Kansas has put the Biden administration’s Department of Education on notice about its fourth attempt to force American taxpayers to pay for others’ student loan debt.
With less than three months left in the administration, the DOE published a notice of proposed rulemaking in the Federal Register on Oct. 31, announcing another attempt by the federal government to pay off student loan debt despite the U.S. Supreme Court ruling it cannot do so. The proposed rule is entitled, “Student Debt Relief for the William D. Ford Federal Direct Loan Program (Direct Loans), the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins) Program, and the Health Education Assistance Loan (HEAL) Program.”
It authorizes Education Department Secretary Miguel Cardona to establish new loan balance waivers for borrowers deemed to be “experiencing hardship” and gives him the authority to cancel student debt for borrowers who have $0 monthly payments. It follows three other waiver attempts all blocked by federal courts.
“This is the fourth time your Department has tried to shift the expense of student loans from those who willingly took them out to the American taxpayers,” the coalition wrote Cardona. “Everyone from the Supreme Court, to President Joe Biden, to former Speaker of the House Nancy Pelosi has publicly acknowledged that you do not have the authority to forgive debt except in the limited ways Congress clearly outlined. You must adhere to these warnings and follow the law.”
The letter also provides a history of agency action the AGs argue are illegal that would have cost federal taxpayers hundreds of billions of dollars if they weren’t blocked by courts.
The DOE first attempted to issue a waiver through the HEROES Act. This would have broadly forgiven between $10,000 and $20,000 for nearly all borrowers and cost taxpayers nearly $430 billion, they note. The Supreme Court squashed that attempt, saying the DOE lacked both “clear” and plausible textual authority.
Ten days after the Supreme Court ruling, the DOE published a final rule claiming the Higher Education Act allowed it to issue a broad-based loan forgiveness program. The rule offered a new income-driven repayment plan “to reduce – and for many borrowers, outright eliminate – monthly payments and forgive the remaining balances,” the AGs argue.
In response, 18 states sued in two separate lawsuits filed by Kansas and Missouri, arguing this rule was also illegal. In June, federal courts in Kansas and Missouri granted separate injunctions, blocking it from going into effect. The cases were appealed to the Tenth and Eighth circuit courts of appeal, respectively.
In August, a panel of judges on the Eighth Circuit issued an injunction pending appeal. The case was appealed to the Supreme Court, which declined to lift the Eighth Circuit’s injunction, keeping it in effect.
Next, the DOE launched yet another rule, the “Third Mass Cancellation Rule.” This gave Cardona broad authority to “waive all or part of any debts owed to the department.” It also granted him authority to create nine new waivers for principal and interest on loans owed.
In August, Missouri learned Cardona was “quietly working behind the scenes with servicers to implement the Third Mass Cancellation Pan before the aggrieved parties could seek judicial intervention,” according to the letter. Missouri and six states sued, requesting the court to block the plan from going into effect. In October, a federal court granted their request saying the rule was “unlawful.”
The injunctions remain in force.
The latest attempt by the administration to circumvent the law and court rulings, the coalition argues, “would fly in the face of the electorate’s decision to change the party in charge of the Executive Branch.”
The AGs demanded that Cardona “withdraw the unauthorized rule to allow the new administration, changing Jan. 20, 2025, to determine the best course of action moving forward.”
The AGs joining Missouri and Kansas include Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah and West Virginia.
Florida Attorney General Ashley Moody also argued the president’s actions were hypocritical, at best.
“[President Joe] Biden clearly does not believe in accountability or the American judicial system,” she said. “He pardoned his felony-convicted son, and he continues to try and force hardworking Americans to pay off the student loans of others – even though we challenged these unlawful policies all the way up to the U.S. Supreme Court and won.”