Litigation Overview and Analysis
Supreme Court Litigation
Brown v. US Dep't of Education
Original Juridiction: N.D. Tx.
Hon. Mark Timothy Pittman presiding
Oral Arguments: Feb. 2023
Plaintiffs, a commercial FFELP borrower and a Direct Loan borrower ineligible for the Pell Grant, allege that they are arbitrarily excluded from cancellation (entirely and partially, respectively).
Nebraska v. Biden
Original Juridiction: E.D. Mo.
Hon. Henry Edward Autrey presiding
Oral Arguments: Feb. 2023
The states argue that, those states with FFELP lending programs will lose revenue because cancellation incentivizes FFELP borrowers to consolidate out of the lender's portfolio, and that MOHELA, which is also a servicer of federally held loans will see a reducation in its servicing portfolio. The six plaintiff states also allege that since cancellation will not be taxed at the federal level, the states of Nebraska, Iowa, Kansas, and South Carolina will see a decrease in income tax revenue.
Other Federal Litigation
Cato Inst. v. US Dep't of Educ.
Juridiction: D. Kan.
Hon. Toby Crouse presiding
Filed: Oct. 18, 2022
The plaintiff, a DC-based nonprofit, alleges that cancellation disincentivizes borrowers from seeking PSLF and thus deprives public service nonprofits of potential employees, putting them at a competitive disadvantage compared to other employers.
Laschober v. Cardona
Juridiction: D. Or.
Hon. Karin Immergut presiding
Filed. Sept. 12, 2022
The plaintiff, an Oregon homeowner with an adjustable-rate mortgage, argues that cancellation will increase rates of inflation and thus, his annual interest expense.
Brown Cnty. Taxpayers Ass'n v. Biden
Juridiction: E.D. Wis.
Hon. William C. Griesbach presiding
Filed: Oct. 4, 2022
The plaintiff, a Wisconsin-based unincorporated association of about 100 members, alleges that cancellation could cost taxpayers more than $1 trillion and is racially discriminatory.
Garrison v. US Dep't of Education
Juridiction: S.D. Ind.
Hon. Richard L. Young presiding
Filed: Sept. 27, 2022
The plaintiff, a Pell Grant recipient and Indiana resident, alleges that cancellation will cause him and similarly situated borrowers in five other states to suffer state income tax liability that they would otherwise be exempt from under the PSLF program.
Arizona v. Biden
Juridiction: D. Ariz.
Hon. Steven Paul Logan presiding
Filed: Sept. 30, 2022
Plaintiff, the state of Arizona, argues that cancellation will prevent its OAG from recruiting legal talent as borrowers will no longer need to rely on PSLF (and public service employment) to have their student loan debt forgiven. Further, Arizona alleges that cancellation will harm the state's economy by decreasing income tax revenue; increasing inflation and the cost of borrowing; and increasing the amount of consumer (cancellation-related) fraud state law enforcement will need to prosecute.