GOP attorneys general seek to stop new attempt at forgiveness of student loans

(The Center Square) – A lawsuit filed by seven Republican attorneys general is alleging U.S. Secretary of Education Miguel Cardona is circumventing legal processes to cancel student loans.

In a 50-page complaint filed in the U.S. District Court in the Southern District of Georgia, the group requests an immediate emergency temporary restraining order, but no later than Friday.

The complaint states the group “just uncovered documents” proving their allegation. They contend Cardona is “unlawfully trying to mass cancel hundreds of billions of dollars of loans and has quietly instructed federal contractors to ‘immediately’ begin cancellation as early as Sept. 3 (but possibly beginning on Sept. 7)” according to the complaint. They claim Cardona could “overnight” forgive $73 billion and hundreds of billions more in the future.

Attorneys general in Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio filed the complaint.

The courts have ruled twice against Cardona and President Joe Biden when they attempted to forgive student loans.

“They may be throwing spaghetti at the wall to see what sticks, but my office is meeting them every step of the way,” Missouri Attorney General Andrew Bailey, who was appointed by Republican Gov. Mike Parson to the office and is running for the position in November, said in a statement.

The attorneys general claim they obtained documents in late August showing Cardona is implementing a loan forgiveness plan without following proper legal processes. Cardona published a notice of proposed rulemaking in April for a third attempt at forgiving student loans under a different statute than the previous two attempts.

Student loan forgiveness would harm institutions in the states represented by the attorneys general, according to the claim. The Higher Education Loan Authority of the State of Missouri, known as MOHELA, services approximately $150 billion in federal loans through the Department of Education and five million federal accounts. MOHELA’s operating surpluses provide hundreds of millions to Missouri’s colleges and universities.

“MOHELA also faces imminent future loss of revenue because, in addition to servicing Federal Family Education Loan (FFEL) program private loans held by Navient, MOHELA holds nearly $1 billion in its own FFEL private loans,” according to the complaint.

The attorneys general also stated the State Bank of North Dakota provides services similar as MOHELA.

The claim states documents obtained in late August show Cardona is implementing the plan without adhering to legal process.

“Those documents instruct third-party organizations that service federal loans to begin cancelling hundreds of billions of dollars beginning potentially this week,” according to the complaint. “… the Secretary quietly sent orders to loan servicing companies to start mass cancelling loans as soon as this week. That is both extraordinarily inequitable and also expressly violates a statute prohibiting the Secretary from implementing rules like this one sooner than 60 days after publication.”

The attorneys general argue Cardona was “arbitrary and capricious” as he designed a program “maximally calculated to evade judicial review. There is no plausible emergency or anything else that would require the Secretary to deviate from the ordinary norm of not implementing any rule until at least 30 to 60 days after publication.”