Biden takes swipe at Mackinac Center in student loan announcement

President Joe Biden announced another student loan cancellation plan Wednesday. The newly announced Save Plan acknowledges that student loan payments will resume in the fall but makes another attempt to shift costs from students and former students to taxpayers.

Rather than pause the loans again or attempt to forgive them, the Save Plan tweaks the system of income-based repayment. Rather than paying 10% of their discretionary income, student loan debtors would pay 5%. As long as they pay 5%, interest on the loan won’t grow.

Biden explained the system in a two-minute video on Twitter. In the video, Biden takes an oblique swipe at the Mackinac Center.

“We've already approved over $116 billion in debt cancellation for 3.4 million Americans,” Biden said, “no matter how many lawsuits, challenges and roadblocks Republican elected officials or special interests try to put our way.”

The Mackinac Center is among the “special interests” Biden is referring to.

Past Biden efforts to shift private student debt onto taxpayers have resulted in new laws and litigation. The debt ceiling bill that Biden signed in June will bring an end to the student loan pause as of Aug. 29. Litigation in Biden v. Nebraska resulted in a U.S. Supreme Court ruling that the Biden scheme was unconstitutional, because the president was usurping the role of Congress.

The Mackinac Center, in partnership with the New Civil Liberties Alliance and the Cato Institute, sued the U.S. Department of Education Aug. 4 to ensure the student loan pause can’t be resumed or replaced by a similar plan. The lawsuit alleges that Biden is governing via press release rather than working through constitutional channels:

The Alliance argues the Department of Education’s actions violate the Constitution’s Appropriations Clause, which grants Congress near-exclusive authority to cancel debt owed to the Treasury. Even if Congress has delegated some authority to the Department of Education, it would still have needed to adopt this plan through the required rulemaking process under the Administrative Procedure Act. Instead, the Department simply issued a press release that did not identify any law providing the authority to enact the Department’s plan.

That lawsuit was dismissed a week later for lack of standing. The Alliance has filed an appeal.