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CATO v. Dept. of Education

CASE: Cato Institute v. U.S. Department of Education, Miguel Cardona, Richard Cordray and Joseph Biden

STATUS: Closed

NCLA ROLE: Counsel

COURTS HEARD IN: D. Kan.

ORIGINAL COURT: U.S. District Court for the District of Kansas

DECIDING COURT: U.S. District Court for the District of Kansas

OPENED: October 18, 2022

AGENCIES: Department of Education

FOCUS AREAS:

Scope of Authority / Nondelegation

The structure of the Constitution allows only Congress to legislate, only the Executive to enforce laws, and only the Judiciary to decide cases. But the Administrative State evades the Constitution’s avenues of governance when executive agencies issue regulations without statutory authorization from Congress.

Did we achieve our litigation objective? Yes. Following Biden v. Nebraska, the Supreme Court struck down President Biden’s unconstitutional attempt to forgive hundreds of billions of dollars of student loan debt.

Court Outcome: Case voluntarily dismissed as moot following Biden v. Nebraska.

Larger Impact: President Biden and the Department of Education were stopped from flagrantly overstepping the authority Congress granted them in the HEROES Act of 2003.

Summary: NCLA filed a lawsuit on behalf of its client, the Cato Institute, urging the U.S. District Court for the District of Kansas to stop the Biden Administration’s student-loan-debt-cancellation plan. NCLA’s complaint argued that the U.S. Department of Education’s unilateral plan to cancel student loan debt has no legitimate claim to statutory authority and effectively strips nonprofits of a significant competitive advantage to recruit and retain talented borrower-employees, thereby frustrating the primary purpose of the pre-existing Public Service Loan Forgiveness (PSLF) program.

The Cato Institute is a nonprofit organization that promotes individual liberty, limited government, free markets and peaceful international relations. Like other nonprofits, including ACLU and NCLA, it attracts and retains talented employees who have student loans with incentives enacted by Congress through the PSLF program. Among other things, the PSLF program allows student loan borrowers to have their outstanding balances forgiven after they work for at least ten years at a qualifying nonprofit organization. The careful and stringent criteria for debt cancellation obtainable under the PSLF program eroded any claim that Congress authorized the Secretary of Education to arbitrarily forgive debt without requiring borrowers to satisfy such stringent criteria.

This case was voluntarily dismissed as moot after the U.S. Supreme Court struck down the Biden Administration’s student loan debt cancellation program in Biden v. Nebraska.

The Cato Institute, Plaintiff

Mark Chenoweth
President and Chief Legal Officer
Sheng Li
Litigation Counsel
NCLA FILINGS

Plaintiff’s Brief Opposing Defendants’ Motion to Dismiss or Transfer

December 13, 2022 | Read More

Plaintiff’s Supplemental Brief Requesting Immediate Decision on Standing and Motion for Preliminary Injunction

December 6, 2022 | Read More

Plaintiff’s Supplemental Memorandum of Law Regarding Standing and Scope of Injunctive Relief

October 31, 2022 | Read More

Plaintiff’s Memorandum in Support of Motions For Temporary Restraining Order and Preliminary Injunction

October 21, 2022 | Read More

Motion for Temporary Restraining Order and Preliminary Injunction

October 21, 2022 | Read More

PRESS RELEASES

Watch: Biden’s Student Loan Debt Cancellation Plan Undermines Congress, Says NCLA

June 8, 2023 | Read More

Biden’s Plan to Cancel Student Debt Undermines Nonprofits, Argues NCLA in Cato Institute Lawsuit

October 18, 2022 | Read More

IN THE MEDIA

The Student-Loan Suspension Is Also Illegal

April 15, 2023

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