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Washington Examiner
Restoring America
22 May 2023


NextImg:An unfair attack on the legal case against Biden’s student loan cancellation

Earlier this month, the New Republic reported on a new paper published jointly by the Debt Collective and the Roosevelt Institute—which attacked the credibility of the legal case against President Joe Biden’s effort to wipe out student debt. Both the summary published by the New Republic and the paper itself argued that the case brought by the six Republican-led states should be rejected on the basis that none had the legal right to sue. Unfortunately, they reflect a flawed analysis and an unfair accusation of deceit.

In order to bring a lawsuit, a plaintiff must demonstrate that they have been harmed. This demonstration of harm is called “standing.” In this case against Biden’s loan cancellation effort, standing is proven if the plaintiff can prove financial damages relative to where they would have been in the absence of the administration’s intervention; relative to what would have happened to them if loans were not cancelled. The article in the New Republic argues that the plaintiffs in the legal challenge of Biden’s plan lack the legal standing to file suit against the administration. The evidence provided for this claim, however, is based on a flawed analysis of the circumstance.

The analysis and the subsequent coverage by the New Republic argue that because the plaintiff, MOHELA—an entity of the state of Missouri, will earn revenues in excess of recent years even if loans are cancelled that they have failed to demonstrate the losses that would entitle them to bring this lawsuit.

However, this argument suffers from a mistake of logic that often plagues armchair economic analysis: considering the wrong counterfactual. The plaintiff in this case needn’t have proven that MOHELA would experience losses relative to past years. Instead, they needed to demonstrate that they’d experience losses relative to what “would have been” in the absence of the implementation of the loan cancellation plan. And this is precisely what the Nebraska Solicitor General James Campbell argued in front of the Justices.

The article also argues that “not as much attention has been paid to the question of whether the states have legal standing to bring the suit in the first place.” This is demonstrably false, as the oral arguments in late February were, in fact, appropriately dominated by discussion over standing.

Whether the six Republican-led states do in fact have standing to sue the administration over the proposed loan cancellation isn’t abundantly clear; and it’s a question that is probably best left to the lawyers. But this article is unfair. The case was brought in good faith. Regardless of the outcome, it made an honest argument. This new research is nothing more than a politically motivated effort to undermine the credibility of the very legitimate case against student loan cancellation and the public official who argued it.

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This article originally appeared in the AEIdeas blog and is reprinted with kind permission from the Heritage Foundation.