Does Anyone Have Standing to Bring a Lawsuit Against Biden’s Student Loan Debt Cancellation Policy?
In previous posts, I criticized both the Biden administration’s legal rationale for the president’s massive student loan debt cancellation policy and a possible alternative justification for it. But many experts think these issues will never get their day in court, because no one will have standing to file a lawsuit challenging debt cancellation. Perhaps the administration sees this procedural issue as their ace in the hole: it doesn’t matter if the legal justification for your program is weak if no one can get into court to challenge it!
The problem of standing is a genuine challenge for opponents of the debt cancellation policy. But it need not be an insuperable one. There are at least three types of litigants who can plausibly get standing: one or both houses of Congress, student loan servicers, and colleges that do not accept federally backed student loans, but compete with those that do.
Under current Supreme Court precedent, plaintiffs have to meet three requirements to get standing to file a lawsuit in federal court: They must 1) have suffered an “injury in fact,” 2) the injury in question must be caused by the allegedly illegal conduct they are challenging, and 3) a court decision should be able to redress the injury.
In my view, the entire doctrine of standing is not a genuine constitutional requirement, and the Supreme Court should abolish it. But that’s highly unlikely to happen. So, for present purposes, I will assume the validity of current precedent. Whether it’s right or not, litigants will have to work within it.
The main potential stumbling block in this case is the requirement of “injury in fact.” It may be difficult to prove that student loan cancellation injures anybody, in the sense required by Supreme Court precedent. Cancelling some of A’s student loan debt doesn’t necessarily injure B and C. The others may believe it is unfair they had to pay off all their loans themselves, while A doesn’t. But, with rare exceptions, current precedent requires some sort of tangible injury. Unfairness, by itself, isn’t enough.
It may be that taxpayers suffer a tangible injury, because loan forgiveness denies funds to the federal treasury, thereby forcing them to bear more of the burden of public expenditures. Any illegal expenditure of public funds necessarily diverts taxpayer resources away from duly authorized purposes. But the Supreme Court has long denied such taxpayer standing, in all but a few unusual circumstances, which aren’t relevant here.
I think taxpayers should have broad standing to challenge any unconstitutional expenditure of public funds. But this is another issue on which the Supreme Court is unlikely to go my way, anytime soon.
But while taxpayers generally do not have standing to challenge illegal uses of public funds by the executive, the Senate and the House of Representatives do! The US Court of Appeals for the DC Circuit so held in a 2020 case where the Democratic-controlled House of Representatives filed a lawsuit challenging Donald Trump’s attempt to divert military funds to build his border wall (a case which has many parallels to the present situation). The decision was written by prominent conservative Judge David Sentelle, who reasoned as follows:
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