NCLA Asks Tenth Circuit to Stop Education Dept.’s Latest Illegal Scheme to Cancel Student Loan Debt
July 29 2024 - 6:08PM
Today, the New Civil Liberties Alliance filed an amicus curiae
brief in Alaska, South Carolina, and Texas v. Dept. of Education
with the U.S. Court of Appeals for the Tenth Circuit. NCLA urges
the Court to affirm and order the expansion of a preliminary
injunction stopping the Department’s “SAVE” plan, which rewrites
the 1993 amendments to the Higher Education Act (HEA) to transform
student-loan-repayment plans Congress authorized into
loan-cancellation plans Congress did not authorize at a $475
billion cost to taxpayers. Partnering with the Cato Institute and
Mackinac Center for Public Policy as amici curiae, NCLA calls for
halting the entirety of this unconstitutional Executive Branch
attempt to wield legislative power.
The district court preliminarily enjoined part
of SAVE because the States of Alaska, South Carolina, and Texas are
likely to prevail in their claim that the plan exceeds the
Secretary of Education’s authority under the 1993 HEA amendments.
The amendments state that “income contingent repayment shall be
based on the [borrower’s] adjusted gross income,” and would “not …
exceed 25 years.” The Department claims this language allows it to
enact SAVE, an income-contingent repayment plan with monthly
payments so low that very little would be repaid by the end of the
repayment period, at which point the substantial remaining balance
would be cancelled.
Nothing in the 1993 amendments’ text or
legislative history suggests Congress granted the Department
discretion to design plans like SAVE that cancel loans instead of
requiring their repayment. If the 1993 law did grant such power, it
would unconstitutionally delegate legislative power, as it contains
no intelligible principle to guide the Department’s discretion of
how generous to make repayment plans. Last week, the U.S. Court of
Appeals for the Eighth Circuit blocked all components of SAVE until
the court can reach a final decision on the request for an
injunction in a separate case against the program. The Tenth
Circuit should do the same in this case. NCLA has also filed an
amicus brief asking the U.S. Supreme Court to lift the Tenth
Circuit’s current stay on the district court injunction
immediately.
NCLA agrees with the district court that Alaska,
South Carolina, and Texas have standing because SAVE injures their
state systems that service federal loans. However, the district
court failed to recognize that the States also have standing as
public-service employers. The Department’s illegal scheme
completely erases the recruitment and employee-retention benefits
state employers enjoy under the Public Service Loan
Forgiveness program, which allows Americans to have student debt
forgiven by completing ten full years of work for qualified
government or nonprofit employers while making monthly payments.
Losing this competitive labor-market advantage inflicts direct and
immediate competitive harm on States, as well as NCLA’s amici
partners.
NCLA released the following statements:
“The Department now claims it has had the power
since 1993 to cancel as much student-loan debt as it wants under
the guise of income-driven repayment (IDR) plans. If that were
true, why did Congress enact legislation in 2007 and 2010 to
establish IDR plans with explicit limits that are far less generous
than what the Department now claims it can establish on its own? In
fact, Congress never authorized the Department to design any plan
that is more generous than what Congress has enacted. The Court
should affirm and expand the injunction against this unlawful
plan.”— Sheng Li, Litigation Counsel,
NCLA
“President Biden wants to reform the Supreme
Court because he says it is not following the Constitution. But
Biden and his Department of Education have been brazenly ignoring a
lawful Supreme Court ruling for over a year now that forbade
student loan debt cancellation without action from Congress. The
States have standing to enforce this injunction, and it should be
upheld in order to vindicate the Supreme Court’s ruling last
year.”— Mark Chenoweth, President, NCLA
For more information visit the amicus
page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights
group founded by prominent legal scholar Philip Hamburger to
protect constitutional freedoms from violations by the
Administrative State. NCLA’s public-interest litigation and other
pro bono advocacy strive to tame the unlawful power of state and
federal agencies and to foster a new civil liberties movement that
will help restore Americans’ fundamental rights.
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Ruslan Moldovanov
New Civil Liberties Alliance
202-869-5237
ruslan.moldovanov@ncla.legal