In a lawsuit filed Friday in Michigan, the groups argue that the administration overstepped its power when it announced the forgiveness in July, just weeks after the Supreme Court struck down a broader cancellation plan pushed by President Joe Biden.
“We are not going to back down or give an inch when it comes to defending working families,” the department said in a statement. The new action was announced as a “one-time adjustment” that would count certain periods of past nonpayment as if borrowers had been making payments during that time. It moved 804,000 borrowers across the 20- or 25-year mark needed for cancellation, and it moved millions of others closer to that threshold.
Biden’s action was illegal, the lawsuit says, because it wasn’t authorized by Congress and didn’t go through a federal rulemaking process that invites public feedback.