Washington, DC, July 01, 2024 (GLOBE NEWSWIRE) — Today, the New Civil Liberties Alliance filed a petition in bench The U.S. Court of Appeals for the Sixth Circuit will hear the case. Mackinac Center for Public Policy, Cato Institute v. Cardona The Department of Education has already begun forgiving borrowers’ debts under the Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) programs, crediting nonpayments during forbearance periods as monthly payments through a “one-time account adjustment.” On behalf of the Mackinac Center and the Cato Institute, NCLA is calling on the in bench A court must put an end to this conspiracy that violates federal law, the Constitution and the Supreme Court of the United States.

The Department of Education announced the illegal plan in July 2023, before the Supreme Court opinion striking down its previous $430 billion student debt cancellation plan had even dried up, on an accelerated schedule to dissuade courts from revisiting it. The administration’s policy counts certain periods of nonpayment as “monthly payments” required to qualify for the debt forgiveness programs. This action results in the cancellation of debt for borrowers who have not yet met the legally required conditions for debt forgiveness.

The Department of Education’s executive order violates the Constitution’s Appropriations Clause, which grants Congress the exclusive authority to spend taxpayer funds to finance debt cancellation. The cancellation also violates loan forgiveness laws that require participating borrowers to make a specific number of monthly payments before their loans are forgiven. Moreover, instead of promulgating the plan through the required notice and comment process and the negotiated rulemaking process under the Administrative Procedure Act, the Department simply issued a press release announcing its desires without bothering to identify the laws justifying the plan.

Forgiving borrowers’ debt through this program eliminates their incentive to participate in the Public Service Loan Forgiveness (PSLF) program by completing 10 full years of work for qualified nonprofit employers while making monthly payments. The administration’s replacement plan therefore directly harms PSLF-benefiting nonprofits like the Mackinac Center and the Cato Institute, and undermines Congress’s goals in enacting PSLF. In May, a Sixth Circuit panel wrongly rejected this admissibility argument in Mackinac Center for Public Policy, Cato Institute v. Cardona.

The panel erroneously held that the economic disadvantage that the Administration’s plan creates for NCLA’s customers relative to competitors is not sufficient to give them standing against it, failing to make factual findings in favor of the plaintiffs and ignoring uncontested allegations that support their standing. The panel further held that no such competitor standing exists because the “adjustment” is directed only at third-party employee borrowers rather than the for-profit employers against whom the plaintiffs compete in the labor market. This standard would preclude judicial review of any unlawful government action that imposes an economic disadvantage, so long as it strategically does so only through third parties such as employees of competitors. in bench The Court should correct these serious errors.

The NCLA released the following statement:

“The panel’s decision rejecting competitive status inexplicably refused to accept uncontroversial facts, such as that nonprofit think tanks compete with for-profit companies for college-educated employees and that counting more than 36 months of nonpayment toward the 120 monthly payments required to qualify for public service loan forgiveness reduces the number of monthly payments a borrower must make. In bench “A review is needed to correct these glaring errors.”
— Sheng Li, Litigation Attorney, NCLA

For more information, visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by distinguished legal scholar Philip Hamburger to protect constitutional liberties from violations by the administrative state. NCLA’s public interest litigation and other pro bono advocacy work aims to rein in the unlawful power of state and federal agencies and foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Washington, DC, July 01, 2024 (GLOBE NEWSWIRE) — Today, the New Civil Liberties Alliance filed a petition in bench The U.S. Court of Appeals for the Sixth Circuit will hear the case. Mackinac Center for Public Policy, Cato Institute v. Cardona The Department of Education has already begun forgiving borrowers’ debts under the Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) programs, crediting nonpayments during forbearance periods as monthly payments through a “one-time account adjustment.” On behalf of the Mackinac Center and the Cato Institute, NCLA is calling on the in bench A court must put an end to this conspiracy that violates federal law, the Constitution and the Supreme Court of the United States.

The Department of Education announced the illegal plan in July 2023, before the Supreme Court opinion striking down its previous $430 billion student debt cancellation plan had even dried up, on an accelerated schedule to dissuade courts from revisiting it. The administration’s policy counts certain periods of nonpayment as “monthly payments” required to qualify for the debt forgiveness programs. This action results in the cancellation of debt for borrowers who have not yet met the legally required conditions for debt forgiveness.

The Department of Education’s executive order violates the Constitution’s Appropriations Clause, which grants Congress the exclusive authority to spend taxpayer funds to finance debt cancellation. The cancellation also violates loan forgiveness laws that require participating borrowers to make a specific number of monthly payments before their loans are forgiven. Moreover, instead of promulgating the plan through the required notice and comment process and the negotiated rulemaking process under the Administrative Procedure Act, the Department simply issued a press release announcing its desires without bothering to identify the laws justifying the plan.

Forgiving borrowers’ debt through this program eliminates their incentive to participate in the Public Service Loan Forgiveness (PSLF) program by completing 10 full years of work for qualified nonprofit employers while making monthly payments. The administration’s replacement plan therefore directly harms PSLF-benefiting nonprofits like the Mackinac Center and the Cato Institute, and undermines Congress’s goals in enacting PSLF. In May, a Sixth Circuit panel wrongly rejected this admissibility argument in Mackinac Center for Public Policy, Cato Institute v. Cardona.

The panel erroneously held that the economic disadvantage that the Administration’s plan creates for NCLA’s customers relative to competitors is not sufficient to give them standing against it, failing to make factual findings in favor of the plaintiffs and ignoring uncontested allegations that support their standing. The panel further held that no such competitor standing exists because the “adjustment” is directed only at third-party employee borrowers rather than the for-profit employers against whom the plaintiffs compete in the labor market. This standard would preclude judicial review of any unlawful government action that imposes an economic disadvantage, so long as it strategically does so only through third parties such as employees of competitors. in bench The Court should correct these serious errors.

The NCLA released the following statement:

“The panel’s decision rejecting competitive status inexplicably refused to accept uncontroversial facts, such as that nonprofit think tanks compete with for-profit companies for college-educated employees and that counting more than 36 months of nonpayment toward the 120 monthly payments required to qualify for public service loan forgiveness reduces the number of monthly payments a borrower must make. In bench “A review is needed to correct these glaring errors.”
— Sheng Li, Litigation Attorney, NCLA

For more information, visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by distinguished legal scholar Philip Hamburger to protect constitutional liberties from violations by the administrative state. NCLA’s public interest litigation and other pro bono advocacy work aims to rein in the unlawful power of state and federal agencies and foster a new civil liberties movement that will help restore Americans’ fundamental rights.