Lawsuit: ‘Unlawful pause’ on student loans cost taxpayers $150B

By SCOTT MCCLALLEN THE CENTER SQUARE

(The Center Square) –A new lawsuit challenges the U.S. Department of Education’s “unlawful pause” on federal student loan payments that have cost taxpayers $150 billion from lost interest.

The lawsuit, filed in the U.S. District Court for the Eastern District of Michigan by the New Civil Liberties Alliance and the Mackinac Center for Public Policy, says Congress lawfully suspended monthly payments and interest accrual on federally held student loans for six months.

However, the lawsuit challenges the legality of the department unilaterally extending the deferment period 30 months past the statutory expiration date of September 2020 without Congressional approval.

Patrick J. Wright, vice president for legal affairs at the Mackinac Center, said perpetual deferment of student loans is “bad policy.” obligations is an unlawful form of debt relief that reduces the incentives PSLF provides and undermines Congress’s goals in enacting that program. of $100,000 helped establish a program reducing recidivism for young females currently or formerly incarcerated or on probation.

So far, the Department of Education has issued eight separate extensions – most recently in November 2022. The department first relied on economic hardship provisions of the Higher Education Act of 1965; then pivoted to the HEROES Act of 2003; then ceased citing legal authorities and stopped publishing new extensions in the Federal Register. It most recently claimed that it had been relying on the HEROES Act all along.

The lawsuit says that only Congress can categorically suspend repayment obligations for all student-loan borrowers nationwide, and only Congress can cancel the accrual of interest on student loan debt owed to the United States.

The department initially issued a short extension to give Congress more time to extend the suspension legislatively.

Another area that the Women’s Fund has assisted in is the Sanctuary Centers. Located in downtown Santa Barbara, the center provides extensive mental health care. Ms. Parker noted there is a “critical shortage of psychiatric services for youth” and that the Women’s Fund provided a grant of $100,000 last year, which was able to fund two more psychiatrists for the program.

A main area that the Women’s Fund focuses on is the homeless population in Santa Barbara.

“The most effective approach to helping homeless individuals transition to permanent housing is to provide safe temporary shelter with support services,” Ms. Parker explained.

A $75,000 Women’s Fund grant last year supported an onsite case management office at the DignityMoves Village in Santa Barbara.

Ms. Parker added that once the grant is given, the Women’s Fund stays committed to staying in contact with the various programs to check on their progress and see where they may need more help.

“The agencies we work with keep us posted on the progress of the projects we fund,” she continued. “We often conduct site visits to allow our members to witness the impact of the work we’re supporting firsthand.” email: abahnsen@newspress.com

The Women’s Fund of Santa Barbara is desiring growth in the Santa Barbara community from volunteers and donors. “We welcome all women to join us!” exclaimed Ms. Parker.

“Perpetual deferment of federal student loans is bad policy because it shifts the burden from those who took out student loans to those who did not,” Mr. Wright said in a statement. “More importantly, it is illegal, as it strips congressional powers and unilaterally hands them to executive bureaucrats. We have a proud history of making sure that the executive branch acts within their constitutional authority, even during a national emergency.”

Congress enacted the Public Service Loan Forgiveness Program in 2007 to help 501(c)(3) nonprofit organizations like the Mackinac Center attract employees with a debt-relief incentive keyed to working 10 years for nonprofits. The lawsuit claims the nonprofits have standing to sue because the suspension of repayment

Still, electorally accountable lawmakers in Congress declined to extend the suspension of payment obligations and interest accrual any further, despite legislating other forms of Covid19 relief.

NCLA litigation counsel Sheng Li said that the administrative state “lacks the power to extend a debt-relief program beyond its statutory deadline.”

“We know that only Congress may suspend student-loan repayment obligations and cancel interest accrued because it took an Act of Congress to provide such debt relief at the outset of the pandemic,” Mr. Li said in a statement. “Congress also enacted a clear six-month deadline for that debt-relief program. The Administrative State lacks the power to extend a debt-relief program beyond its statutory deadline, especially when doing so costs taxpayers over $150 billion.”