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By Holly Wetzel
MIDLAND, Mich. — A district court Thursday dismissed a challenge to the Department of Education’s student loan deferment extension that has cost taxpayers tens of billions of dollars.
The United States District Court of the Eastern District of Michigan cited lack of standing in throwing out a suit by the Mackinac Center for Public Policy, represented by the New Civil Liberties Alliance, that challenged the Department of Education’s unilateral extension of the loan deferment program.
The department, without congressional authority, repeatedly extended the payment pause. The Mackinac Center filed suit in May 2023.
As part of the CARES Act, Congress initially authorized a six-month pause on student loan payments at the start of the COVID-19 pandemic. Congress had the authority to appropriate the approximately $30 billion that the pause cost taxpayers during the emergency. However, the Department of Education continued to extend the pause for over two more years, costing taxpayers an additional $5 billion each month. The Mackinac Center and NCLA argued that the department did not have the authority to do so without Congressional approval.
Despite this setback, a different challenge to the Biden Administration’s illegal student loan forgiveness made strides at the U.S. Eighth Circuit Court of Appeals. The court placed an administrative stay on the Biden Administration from implementing or acting until the court rules on the motion for a preliminary injunction.
The Mackinac Center and NCLA, along with the Cato Institute, are involved in a separate lawsuit against the Department of Education’s early forgiveness for borrowers under the Public Service Loan Forgiveness and Income Driven Repayment programs. This case is currently before the U.S. Sixth Circuit Court of Appeals.
“The Separation of Powers is a very simple concept,” said Patrick J. Wright, vice president for legal affairs at the Mackinac Center. “You learn by watching Schoolhouse Rock that Congress passes bills. Yet the Biden Administration seems determined to ignore this simple fact. When the merits of all of these separate challenges are addressed, the administration will lose.”
The Mackinac Center is likely to appeal the court's decision in this case.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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