Biden’s student loan plan explicitly and illegally helps black borrowers, the group says

A Wisconsin group claims President Biden’s plan to cancel up to $20,000 in student loan debt violates federal law by deliberately trying to narrow the racial wealth gap and help black borrowers.

The claim is among the allegations in a lawsuit filed Tuesday by the conservative legal entity Wisconsin Institute for Law and Liberty on behalf of the Brown County Taxpayers Association. The complaint is largely based on arguments about excessive leadership that have been raised in other lawsuits to block Biden’s plan.

However, it stands out by also bringing race into the mix.

In promoting the debt relief plan, the White House has said it could help narrow the racial wealth gap and promote racial equality. But the lawsuit claims those statements constitute an “improper racial motive” and violate the Constitution’s guarantee of equal protection of the laws.

“The White House has indicated that one reason for doing this is that they believe it would disproportionately benefit certain racial groups,” said Rick Esenberg, president and general counsel of the Wisconsin Institute for Law and Liberty. “The racial motivation supports these taxpayers who stand to challenge [the policy] and informs another constitutional difficulty with the program.”

The president’s policy would cancel up to $10,000 in federal student loan debt for borrowers earning less than $125,000 a year, or less than $250,000 for married couples. Those who received Pell Grants, federal aid for lower-income students, could see up to $20,000 forgiven.

There are no racial criteria for loan forgiveness. But because of the disparities in who has student loans, the cancellation policy may have an overarching effect on black borrowers, who take on a disproportionate share of the debt and often receive Pell Grants due to a lack of financial resources to attend college.

The faces of student debt

“Student loan policies have had a discriminatory impact, and canceling student debt helps alleviate some of that discriminatory impact, but this is a race-neutral policy,” said Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project.

Genevieve Bonadies Torres of the Lawyers’ Committee for Civil Rights Under Law said the lawsuit “flips the Safeguards Clause on its head,” since the mere awareness of race or a disproportionate impact does not amount to a violation of the law. She said conservative groups have unsuccessfully used similar arguments to challenge high school admissions policies that expand access for marginalized students.

“I can think of a ton of policies and practices that disproportionately help white people that, again, are not put under the legal microscope,” Bonadies Torres said. The lawsuit “is indicative of the attacks that we’re seeing on all avenues that try to get people relieved that they have to.”

Targeting emergency aid to borrowers with the greatest financial need, the White House has said, could address the racial wealth gap. The administration also noted the benefits for borrowers of all ages and those from low- and middle-income households. It has framed the plan as a way to give Americans a stronger economic footing as they emerge from the pandemic.

White House press secretary Karine Jean-Pierre said Tuesday that the president is making good on a campaign promise to help more than 40 million Americans stuck in student debt and people affected by the economic upheaval caused by the global health crisis.

“It’s a shame that you have Republican groups, Republican states, trying to prevent Americans from getting a little bit of respite, a little bit of a break,” Jean-Pierre said during a press briefing. “It is shameful that they take sides for the special interests. It is shameful that they do not side with the American people. This is one of the ways the President will continue to work for the American people.

The Biden administration has insisted it has the legal authority to cancel student debt, citing a 2003 law that gives the executive branch broad authority to overhaul student loan programs. It faces several legal challenges, including one from a coalition of six Republican-led states, which could delay or halt implementation of the policy.

The Wisconsin Institute for Law and Liberty and other conservative advocacy groups argue that Biden’s policy represents illegal overreach because the 2003 law was created to give the president authority after a disaster like the terrorist attacks of September 11, 2001. The group also argues that the executive lacks authority to create a new pardon politics and usurps the power of Congress to make law.

“The question is not as simple as whether you like student loan forgiveness or you don’t like student loan forgiveness. It’s also whether you really want to set a precedent where a president of the United States would have this kind of authority ,” Esenberg said. “Process and the rule of law matter.”

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