THE ADMINISTRATION WAS BEING sneaky from the start.
From the moment President Joe Biden announced the student loan forgiveness program on August 24, 2022, it set off alarm bells. The president said the Department of Education would automatically cancel $10,000 to $20,000 in student debt for millions of Americans. Estimates pegged the total cost of the program at $500 billion—a staggering number. Clearly, President Biden was trying to fulfill a promise he’d made on the campaign trail, no matter how high the price tag.
The initial press release and shoddily written FAQ were sketchy on details about how, legally, the forgiveness program would work. The Department of Education’s power to forgive the debt ostensibly came from a 20-year-old law, the HEROES Act. But as that law’s drafters made clear, it was intended to help veterans and their families—not to give the executive branch a roving license to arrange handouts for every American with student debt.
“The Biden administration has to know it lacks the authority to unilaterally cancel a half-trillion dollars in student debt,” The Wall Street Journal said.
At Pacific Legal Foundation, we immediately knew the program was unconstitutional. In our early conversations after the program was announced, “everyone had the assumption that this is illegal,” my colleague Caleb Kruckenberg remembers. “The HEROES Act doesn’t do what they say it does. But what are we going to do? Who’s going to challenge it?”
After the Biden administration’s press release, we waited for a formal announcement from the Department of Education—because that’s usually how things work: The government announces it’s going to do something, then follows up by taking formal regulatory steps. Without a formal rulemaking, it’s hard to challenge something in court.
“We were expecting them to do a proper process,” my colleague Michael Poon remembers. “An orderly process.”
So we waited—and a couple weeks went by.
Two Weeks to File
CALEB WAS THE ONE who figured it out.
“I had a meeting on the Hill,” Caleb says. There was news buzzing through Congress: The administration, it seemed, was planning to completely sidestep all regulatory procedures for student loan forgiveness.
“That’s when we realized: They weren’t going to issue a formal thing,” Caleb says. “They were planning to initiate the program in October, as soon as October 1. They were just going to do it. And then they were going to go, ‘Look what we just did.’”
By this point it was mid-September. In as little as two weeks, the Biden administration would spend billions on an unprecedented debt forgiveness program, without congressional approval or any formal regulatory review.
“We realized: We have to scramble to stop this,” Caleb says.
It was a crazy moment. We all knew that if the administration successfully disbursed the funds in October, challenges to the program would likely be fruitless.
“Once it goes through, there’s nothing you can do,” Caleb says. “We can’t take back the money. There are due process problems.”
This seems to have been the administration’s plan all along: to be vague enough that it could rush into launching the debt forgiveness before anyone could challenge the program in court. It was a deliberate plan to avoid challenge—because even among the president’s own supporters, the program was deeply unpopular. Bills with similar programs had been proposed in both the House and Senate but had gone nowhere. By announcing the program through a press release, and trying to rush to spend the money, the Biden administration was essentially saying: We’re going to do it anyway, because you’re not going to be able to stop us.
At this point, of course, PLF was eager to file a lawsuit—but we needed a client, someone with standing to sue. That created its own challenges: To have standing to challenge a government program, you need to show how you’d be injured by the program. Here, the federal government was giving out free money. Who could show that they were harmed by it? And how could we find that person before October?
My Strange Role in the Lawsuit
THIS IS A GOOD TIME to mention that I live in Indiana.
A few years ago, Indiana changed its laws to make loan forgiveness taxable as income. A few other states have similar laws.
I should also mention that, as an attorney who has spent his career working at non-profits, the balance of my student loan debt will be forgiven in about four years through the federal Public Service Loan Forgiveness program. That program, unlike Biden’s proposal, was passed by Congress. (It was signed by President George W. Bush in 2007.) Indiana will not tax me on my public service loan cancellation because it’s grandfathered into the law.
But the Biden loan forgiveness would be a different story.
The Biden administration was planning to automatically forgive $20,000 of my student debt. Indiana would then tax me on that $20,000—meaning I’d be on the hook to pay about a thousand dollars extra in taxes for forgiveness I didn’t ask for and that wouldn’t help me.
I brought it up at a meeting with the other attorneys. The student loan forgiveness program is going to personally cost me a thousand dollars, I told the other attorneys. Maybe we can find someone in my situation to bring a case.
I didn’t really intend for me to be the client. As an attorney, you want to make a name for yourself by bringing cases, not by being the client in a case. But things were moving so fast. We were witnessing an egregious violation of the separation of powers, and we had such a short amount of time to challenge it.
My colleagues immediately began spit-balling: Could PLF represent one of its own attorneys?
“The default mood was like, ‘We’re not going to represent Frank,’” Michael remembers. “But Caleb and I were raring to go. We were like, ‘Well, why can’t we? Why shouldn’t we do this in the next week?’”
“This was the needle in the haystack,” Caleb says.
Once the team decided PLF could represent me, and it seemed clear we didn’t have time to find anyone else, I agreed to be the plaintiff.
That was on September 20. Now the countdown clock until October was on.
The Center of a National Storm
FOR A WEEK, Caleb and Michael worked at a frantic pace to draft our complaint and a motion for preliminary injunction. I gave them access to all the personal information they needed.
“We worked all day and night for seven days,” Michael remembers. He was working out of his home in Utah; Caleb was in DC; and I was in Indiana. We coordinated by chat and video calls.
It was an odd experience, as an attorney, to suddenly become a client. I had a window into what it feels like to open up your life so that your story can become the basis for legal action. It’s unnerving—and it gave me tremendous respect for every PLF client.
We filed the lawsuit only a few short days before October, on Tuesday, September 27, 2022. My face was suddenly on Fox News. Caleb had to travel to Colorado that day to argue a different case before the Tenth Circuit Court of Appeals. “I did Megyn Kelly’s show that night from Denver,” Caleb remembers.
Our lawsuit was major national news. We immediately got hate messages from people who wanted their loans forgiven. After appearing on television, Caleb got phone calls and emails, including messages like, I hope you die. I’m going to come after your family.
I was getting hateful messages too, mostly on Twitter. I shut down my account.
Meanwhile, White House press secretary Karine Jean-Pierre was asked about our lawsuit in her daily briefing. She denied that people like me would automatically get their loans forgiven—even though that’s what the government’s own website said.
The next day, on September 28, Caleb checked the website again. Someone had changed it overnight: Now, it said people like me could opt out of forgiveness.
The Biden administration was deliberately changing the rules of their program on the fly to sidestep our lawsuit. “It was insulting,” Caleb says. “Once we sued, it was all a big game. They’d change it just enough to make sure we couldn’t sue. They’d update the FAQ all throughout. Because it’s all fake. It’s not a law, it’s not a regulation. They were making it up as they went along.”
The Result of the Case…
LARGELY BECAUSE OF THE GOVERNMENT’S CHANGES TO ITS OWN PROGRAM, the district court and Seventh Circuit Court of Appeals both ruled that we’d lost our standing to sue.
But we had managed to pause the implementation of the forgiveness program at a critical time, right before the money was supposed to be disbursed. After we filed our lawsuit, a group of states filed another lawsuit. And the government put the program on indefinite hold until all legal challenges were worked out.
By the time you read this, the Supreme Court may have weighed in on the states’ lawsuit challenging the constitutionality of the forgiveness program. Pacific Legal Foundation filed an amicus brief in that lawsuit on behalf of the legislators who wrote the HEROES Act and who object to its misuse.
Our staff still receive hate mail for PLF’s role in halting the loan forgiveness program before it got off the ground. When my colleague Jessica Thompson went on CNN to talk about the states’ lawsuit at the Supreme Court, she received messages so vile they can’t be excerpted here, not even partially.
So even though PLF’s lawsuit has not made it past the Seventh Circuit, was it worth it—the frantic rush to file, the sleepless nights, the hate mail?
Without a doubt.
“Our arguments were right,” Michael says. “And for a second it felt like we might be the only guys standing between Biden and $500 billion. We had to do it.”
He adds: “When something really terrible is coming down the pike, you should be biased toward action. And we were. A lot of times that means you’ll fail. But it’s important enough to try.”