WaPo warns of 'stark financial consequences' if GOP blocks Biden student loan handout: 'would be terrible'

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A Washington Post report on Friday warned that GOP lawsuits or the Supreme Court could find President Biden’s student loan handout illegal and spoke to how much that would hurt people who wanted their debt forgiven as Biden promised.

Compiled by reporters Tony Romm, Jeff Stein and Danielle Douglas-Gabriel, the piece opened with the news that "Republican state attorneys general and other leading conservatives are exploring a slew of potential lawsuits targeting President Biden’s plan to cancel some student debt — challenges that could limit or invalidate the policy before it takes full effect."

Though sources have "cautioned that no decisions have been made — and as of Thursday morning, no lawsuits appeared to have been filed," Washington Post noted, though it quoted that Heritage Foundation’s Meese Center director John Malcolm who confirmed, "conservative public interest law firms in our network are exploring filing lawsuits against this. They are doing background legal research, trying to find out who might be the most suitable clients for them."

The piece then exposed the danger of assessing the legality of Biden’s handout, writing, "a legal battle could carry stark financial consequences for millions of student borrowers, who rejoiced last week after Democrats delivered on a long-standing promise to erase some of their debt."

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A Washington Post report touted how "terrible" it would be if the GOP were to block President Joe Biden's student loan handout.  (© 2011 C. O'Kane)

Such a legal battle could also present "the prospect of a broader, precedent-setting courtroom tussle over the scope of the president’s economic authority," the piece warned, adding that the lawsuit could "reach the Supreme Court, thrusting it back into the spotlight after it infuriated Democrats by stripping abortion protections and limiting the Environmental Protection Agency’s power to respond to climate change."

The Post reminded its readers that Biden’s handout proposal – providing absolution on $10,000 of student debt per student borrower currently earning less than $125,000 – "marks a major financial benefit for many debtors."

It then noted that some of these debtors have "expressed horror that they could lose the help before it even arrives." The piece featured a quote from one borrower concerned that Biden’s plan would be stopped by lawsuits. 

31-year-old borrower Michael Loomus told the Post, "That would be terrible." He added, "It just seems they are continuously trying to keep borrowers in debt. I don’t make a lot of money … and before this, it just felt like I’d never pay off my loans."

The Post reporters wrote that "The Biden administration has been adamant that its policy is legal," and mentioned that "The Justice Department released a 25-page memo last week justifying debt cancellation as ‘appropriate’ under a 2003 law giving the executive branch broad authority to overhaul student loan programs."

The Biden administration however, has insisted that it is on good legal grounds with its student loan handout plan. (AP Photo/Evan Vucci)

The piece also cited Harvard law professor emeritus Laurence Tribe, who said, "The legality is very, very strong. … The language of the Heroes Act states that in a national emergency, the president can take action that includes suspending or canceling debt."

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Including the GOP’s main legal complaint about the handout, the Post stated, "Republicans have also said the plan is illegal because it wrests spending powers given to Congress, arguing that the 2003 law was never intended to give the executive branch such unilateral, broad authority."

The report also noted that "Some independent legal experts say a legal challenge could prove successful." Fordham Law School professor Jed Handelsman Shugerman claimed that the DOJ’s memo justifying the handout "did not fit either the nature of the broad action or the way the White House has defended it." He warned that the Supreme Court will "likely" strike it down if the White House continued with its current legal argument. 

One of the piece’s authors, White House economics reporter Jeff Stein, presented a more candid pushback to the GOP’s efforts to sue Biden over the handout on Twitter Thursday. He tweeted, "Trying to imagine just how angry people will be if the $10K or $20K in student debt cancelation promised by Biden is blocked by GOP/conservative efforts through the courts."

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Washington Post White House economics reporter Jeff Stein tweeted that people will be "angry" if the loan handout is blocked. (REUTERS/Jonathan Ernst/File Photo)