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Media Domino: A Blog About Student Debt Sham Lawsuits Blocking Student Debt Cancellation from Millions of Borrowers Have Massive Legal Holes

Sham Lawsuits Blocking Student Debt Cancellation from Millions of Borrowers Have Massive Legal Holes

By Amber Saddler and Amy Czulada | November 23, 2022

Over the summer, President Biden announced a historic student debt relief plan that would cancel up to $20,000 in student debt for federal borrowers who make under $125,000 per year individually or under $250,000 per household. Since then, President Biden’s political opponents have filed frivolous lawsuit after lawsuit in hopes that one sticks and blocks relief. These sham lawsuits pose risks not only to the student loan cancellation program on the table but to the principle of separation of powers that is supposed to inform the judiciary’s decision-making overall. 

The application for debt relief was released in mid-October, and in just a few weeks more than 26 million borrowers applied. During that time, the Department of Education approved 16 million applications—leaving these borrowers a mere click away from relief. As millions of Americans with student debt jumped at the opportunity to finally be freed of their debt, in mid-November, a Trump-appointed judge in Texas struck down the President’s debt relief program—shutting the door to relief for millions.

The court in that case, ironically entitled Brown v. Department of Education, was the first to rule against President Biden’s student debt relief plan. In fact, prior to the decision in Texas, every court had dismissed the case based upon a lack of “standing.” Why is this important and what does this mean for the future of student debt cancellation?

Lack of Standing

Standing is an important component of any lawsuit and is required for a federal court to even begin to consider a case before them. In order to have standing to bring a lawsuit, a plaintiff must show how they will be harmed. It is important to note that not every disagreement has the right to be hashed out in federal court. Standing helps to determine whether a plaintiff has the legal right to sue or not. 

The plaintiffs in Brown and all the other lawsuits suing to stop the cancellation program must show that student debt cancellation will somehow cause them a “concrete [and] particularized harm— AND that this harm can be fixed by a favorable ruling.[1]

Unfortunately for millions of struggling student loan borrowers still reeling from the ongoing effects of the pandemic, recent partisan attacks on the President’s debt relief program in the courtroom show precisely why the Supreme Court has long established the doctrine of standing as a first line of defense against sham lawsuits seeking to use the judiciary to unlawfully overrule the political branches.

Recently, however, several far-right judicial appointees have thrown this precedent out of the window. Most notably in Brown, Trump-appointee Judge Mark Pittman ruled that cancellation is unlawful without satisfactorily explaining how the plaintiffs had standing to bring up the case in the first place. 

Legal Nonsense

Here are the details. In this case, two federal student loan borrowers–one ineligible for relief and another ineligible for the full $20,000 in relief–sued because they argue that they didn’t have the procedural opportunity to submit feedback on the program before it was implemented–a common government agency procedure known as “notice and comment rulemaking.” They claim that if the Department had only given them the procedural opportunity to comment, they would have asked to be included.

Judge Pittman agreed and found that the plaintiffs had standing to pursue their claim because the Department ignored notice and comment rules in developing the cancellation program. However—wait for it—in the very same ruling, Pittman also admitted that the cancellation program was exempted from those rules.[2]

Student debt cancellation is authorized by the Higher Education Relief Opportunities for Students (HEROES) Act, which allows the Secretary of Education special authority to “waive or modify” statutory or regulatory rules related to federal student loan programs to mitigate the negative financial effects of a national emergency. In this case, the national emergency is the devastating COVID-19 pandemic.

The HEROES Act also explicitly exempts the Secretary’s actions from notice-and-comment rulemaking (the same administrative process that the plaintiffs rest their case on!).  Judge Pittman acknowledged that exemption in his ruling, while also granting the plaintiffs’ request to dismantle the entire program altogether. 

Even more confusingly, instead of requiring the Department to go back and follow these procedural rules and consider including these two borrowers in the cancellation program, this Trump-appointed judge simply eliminated cancellation for all borrowers. If this seems confusing and nonsensical to you, you are not alone. That the plaintiffs sought—and the judge ruled in favor of—total destruction of the program rather than expansion is yet another sign that this case, like the other cancellation lawsuits already struck down, is nothing more than an attempt to manipulate the judiciary in order to thwart helping working people. 

Implications of these Sham Lawsuits

In addition to blocking millions of people from student debt relief, this case will embolden others who are looking to curtail critical government programs by bringing sham cases before partisan judges motivated by politics rather than the law and legal precedent. 

And the partisan attacks on student loan cancellation in particular may be just beginning. The week after the Brown ruling was issued, without ever addressing the merits, an Eighth Circuit panel of judges in Missouri granted several Republican-led states’ emergency request to stop cancellation while the states appealed a decision by a lower district court that had already dismissed the case for—you guessed it—a lack of standing.

In this case, Nebraska v. Biden, the plaintiff-states speculate that cancellation of debts for low- and middle-income borrowers would decrease profits for MOHELA, a student loan servicing giant. The Missouri Attorney General claims that MOHELA’s loss will somehow harm Missouri even as Missouri residents seek to receive nearly $13 billion dollars of student debt relief. (P.S. MOHELA isn’t even actually part of the Missouri state government.) The state argued that lining the pockets of a student loan company is more important to the public interest than helping millions of Americans recover from the COVID-19 pandemic. The Biden Administration has appealed this emergency injunction to the Supreme Court. 

While Brown, Nebraska, and a litany of other sham lawsuits wind their way through the federal courts, the fate of student debt relief is uncertain and 40 million eligible student loan borrowers—including 26 million who have already applied for debt relief—remain in limbo. The fight to protect debt relief marks a troubling new chapter in judicial manipulation. 

One thing is certain, student loan borrowers should not be caught in the middle of these political games and should not be forced to begin repaying their loans until the promise of debt relief is fulfilled. If you are one of these borrowers waiting for debt relief, share your story here or write a letter to the White House calling for the President to implement debt relief through all available legal tools.


Amber Saddler is a Counsel at the Student Borrower Protection Center. Previously, she was a Dorot Fellow at the Alliance for Justice where she worked on issues related to federal judicial nominations and increasing access to the courts for marginalized people. 

Amy Czulada is the Outreach & Advocacy Manager at the Student Borrower Protection Center. Previously, Amy was a Research Analyst at 32BJ SEIU in New York City.

[1] Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010).

[2] Order at 18, Brown v. U.S. Dep’t of Educ., No. 4:22-cv-0908-P (N.D. Tex. 2022).

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