State attorneys general in 18 states have banded together to sue the Biden administration over the Saving on a Valuable Education (SAVE) Plan, which is slated to cost taxpayers between $250 to $750 billion. The plan was announced last summer as “plan B” after the Supreme Court struck down Biden’s initial unlawful attempt to cancel student loans. The plaintiffs rightly argue that Biden does not possess the legal or constitutional authority to forgive student debt at this scale, crafting a range of arguments and filing a couple of lawsuits to stop the president in his tracks.

While many commentators on both the left and right have agreed that the Biden Administration is exceeding its authority, there has seemed to be a bipartisan consensus for months that they might get away with it. But that’s changing now, as was demonstrated in a recent AEI event hosted by Michael with some of the legal scholars and state attorneys leading the charge to stop SAVE. 

Paul Zimmerman, senior counsel at the Defense of Freedom Institute, said that he’s hopeful that one of the lawsuits will succeed. “And I would also say a nationwide injunction seems likely because it would be impossible to implement student loan provisions in some states, but not others. So I think that it would be a total victory,” he said. “I think the writing was on the wall a year ago when the Supreme Court came down with the Nebraska case,” said Sheng Li, litigation counsel at the New Civil Liberties Alliance.

One of the largest hurdles facing litigants at present is the ability to establish standing (basically, proving to a court that you have sufficient connection to and suffered harm from the defendant). This is particularly difficult in cases where the president spends taxpayer money, because there is no such thing as “taxpayers’ standing.” As a result, states and other litigants have developed three main theories of standing to get in front of courts to challenge the plan’s legality and constitutionality:

• State revenues will be affected because the forgiveness amount is not taxable in this case due to a provision in the American Rescue Plan.
• Employers who use special programs such as Public Student Loan Forgiveness (PSLF) argue that mass forgiveness undermines their ability to attract and retain talent. Nonprofits, for instance, often attract graduates with large student loan balances, because they can have their loans partially forgiven through PSLF.
• Loan servicers like MOHELA are semi-governmental entities. They are empowered to service loans originated through the Federal Family Education Loan (FFEL) program and argue that mass forgiveness will negatively impact their revenues, because they will simply have fewer loans to service. MOHELA’s affiliation with the state of Missouri was crucial to the successful Biden v. Nebraska loan forgiveness case last year.

 Here are the two major ongoing lawsuits against SAVE currently making their way through the legal process:

• Kansas, Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas, and Utah have sued the Biden administration on the grounds that the SAVE Plan is just as unconstitutional, if not more, than the previous forgiveness plan that he introduced and the Supreme Court struck down. Abhishek Kambli, deputy attorney general for the State of Kansas, highlighted the Biden administration’s “sloppiness,” including in expressing optimism that their original loan forgiveness would survive challenges after the Supreme Court had already struck it down. This is giving them steam in their legal arguments, with the case recently surviving a motion to dismiss in US District Court. You can read the full lawsuit here.
• Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma have similarly sued Biden, tracing a line between his attempts to use executive power during the COVID-19 pandemic and loan forgiveness. Just like his efforts to establish a national eviction moratorium and broad vaccine mandates, the plaintiffs claim that he is once again brazenly abusing executive power in the face of repeated legal reprimand. Stephen Petrany, solicitor general for the State of Georgia, says that the judge for this case seems skeptical of the Biden administration’s merits arguments. “I think on standing, the judge seemed to get that, [and that] at the very least MOHELA has standing, and that should be enough,” he said. You can read the full lawsuit here.

 If Biden’s SAVE program allows the executive branch to discharge hundreds of billions of dollars in loans without Congress, what can’t the executive branch do? The survival of this program could have serious negative consequences for maintaining the Constitution’s separation of powers and the future of higher education. There is growing optimism that one of these lawsuits will succeed, but it is far too early for plaintiffs and their supporters to allow themselves too much confidence.

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