`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MISSOURI
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`Civil Action No. _________________
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`) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
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`Plaintiffs,
`
`
`STATE OF MISSOURI,
`STATE OF ARKANSAS,
`STATE OF FLORIDA,
`STATE OF GEORGIA,
`STATE OF NORTH DAKOTA,
`STATE OF OHIO, and
`STATE OF OKLAHOMA
`
`
`
`v.
`
`JOSEPH R. BIDEN, Jr., in his official
`capacity as President of the United States,
`
`MIGUEL A. CARDONA, in his official
`capacity as Secretary, United States
`Department of Education, and
`
`UNITED STATES DEPARTMENT OF
`EDUCATION,
`
`
`Defendants.
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`
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`
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`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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`INTRODUCTION
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`1.
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`Yet again, the President is unilaterally trying to impose an extraordinarily
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`expensive and controversial policy that he could not get through Congress. This latest attempt to
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`sidestep the Constitution is only the most recent instance in a long but troubling pattern of the
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`President relying on innocuous language from decades-old statutes to impose drastic, costly policy
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`changes on the American people without their consent.
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`2.
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`The President has attempted this in area after area of the economy, from imposing
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`unlawful vaccine mandates across the country, to imposing unlawful and backbreaking regulations
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`on energy producers, to arrogating for himself the power to prohibit every landlord in the nation
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`
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`from initiating eviction proceedings. West Virginia v. EPA, 597 U.S. 697 (2022); Natl. Fedn. of
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`Indep. Bus. v. Dept. of Lab., Occupational Safety and Health Administration, 595 U.S. 109 (2022);
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`Alabama Ass’n of Realtors v. Dep’t of Health and Human Servs., 141 S. Ct. 2485 (2021); see also
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`Georgia v. President of the United States, 46 F.4th 1283 (11th Cir. 2022) (vaccine mandate
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`executive order exceeded the President’s authority under major questions doctrine); Louisiana v.
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`Biden, 55 F.4th 1017 (5th Cir. 2022) (same); Texas v. NRC, 78 F.4th 827 (5th Cir. 2023)
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`(temporary licensing program exceeded agency’s authority under major questions doctrine); cf.
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`Texas v. United States, 50 F.4th 498, 526 (5th Cir. 2022) (DHS final rule on DACA was foreclosed
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`as it “undoubtedly implicates questions of deep economic and political significance” without
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`“clear congressional authorization”).
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`3.
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`He has also done so in express defiance of the Supreme Court. The eviction-
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`moratorium case provides a good example. The President unlawfully attempted to impose a
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`nationwide eviction moratorium just one month after five justices on the Supreme Court noted that
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`the President lacked legal authority to do so. Alabama Ass’n of Realtors, 141 S. Ct. at 2488 (stating
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`that four justices voted to block the moratorium in June 2021 and a fifth, while declining to block
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`the moratorium because it was expiring imminently, made clear that “the CDC’s moratorium
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`exceeded its statutory authority”). The President recognized that a majority of the Supreme Court
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`justices had already said his eviction moratorium was unlawful and “that lawmakers would need
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`to pass legislation to extend the moratorium after a recent Supreme Court decision signaled the
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`CDC couldn’t lawfully extend its moratorium again absent congressional authorization,” but the
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`President imposed the moratorium anyway. Ackerman, Biden Administration Issues New Eviction
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`Moratorium, WSJ (Aug. 3, 2021).1 When he did so, the Supreme Court was forced to block the
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`1 https://www.wsj.com/articles/biden-administration-set-to-issue-new-eviction-moratorium-11628022282
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`2
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`
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`executive action, declaring that the President’s statutory argument “strains credulity.” Alabama
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`Ass’n of Realtors, 141 S. Ct. at 2486.
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`4.
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`His student loans actions are no different. Just last year, the Supreme Court struck
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`down an attempt by the President to force teachers, truckers, and farmers to pay for the student
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`loan debt of other Americans—to the enormous tune of $430 billion. Biden v. Nebraska, 143 S.
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`Ct. 2355, 2362 (2023). In striking down that attempt, the Court declared that the President cannot
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`“unilaterally alter large sections of the American economy.” Id. at 2375.
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`5.
`
`Undeterred, the President is at it again, even bragging that “the Supreme Court
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`blocked it. They blocked it. But that didn’t stop me.”2
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`6.
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`Indeed, just 10 days after the Supreme Court issued its decision in Biden v.
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`Nebraska, the Federal Government published a rule that seeks to “cancel” an even larger amount
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`of student loan debt, forcing American taxpayers to pick up the tab. The Final Rule is titled
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`“Improving Income Driver Repayment for the William D. Ford Federal Direct Loan Program and
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`the Federal Family Education Loan (FFEL Program).” See 88 Fed. Reg. 43,820. A true and correct
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`copy of the Final Rule is attached hereto as Exhibit #1.
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`7.
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`That new rule is the subject of this lawsuit—referred to by Defendants as the
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`“SAVE Plan”—and is set to take full effect on July 1, 2024.
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`8.
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`The Wharton School of the University of Pennsylvania estimates the economic cost
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`of the President’s newest rule at $475 billion across 10 years, $45 billion more than the program
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`struck down by the Supreme Court. Biden’s New Income-Driven Repayment (“SAVE”) Plan:
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`Budgetary Cost Estimate Update, Penn Wharton University of Pennsylvania (July 17, 2023).3
`
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`2 Remarks by President Biden on the Saving on a Valuable Education Plan, Culver City, CA, (Feb. 21, 2024),
`https://www.whitehouse.gov/briefing-room/speeches-remarks/2024/02/21/remarks-by-president-biden-on-the-
`saving-on-a-valuable-education-plan-culver-city-ca/
`3 https://budgetmodel.wharton.upenn.edu/issues/2023/7/17/biden-income-driven-repayment-budget-update
`
`
`
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`3
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`Case: 4:24-cv-00520-JAR Doc. #: 1 Filed: 04/09/24 Page: 4 of 62 PageID #: 4
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`
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`Others estimate the total economic cost as even higher, more than $1 trillion—more than double
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`the cost of the program declared unlawful last summer. See, e.g., Travis Hornsby, New REPAYE
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`Plan Could Save Borrowers Over $1 Trillion Over 10 Years, Student Loan Planner (Dec. 20,
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`2023).4
`
`9.
`
`The President, in fact, was in such a rush to defy the Supreme Court that the Federal
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`Government failed to update the Final Rule to account for the Supreme Court’s decision. Not only
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`does the rule never cite Biden v. Nebraska, but it even goes so far as to conduct a cost-benefit
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`analysis on the false assumption that the Supreme Court had upheld the rule, see 88 Fed. Reg.
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`43875, when the Supreme Court in fact did the opposite, Biden v. Nebraska, 143 S. Ct. at 2375.
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`This alone is arbitrary and capricious, and it is just the tip of the iceberg.
`
`10.
`
`The Federal Government admits that Congress created an income-driven
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`repayment system—called “Income Based Repayment” or “IBR”—that statutorily permits
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`student-loan cancellation only after a borrower pays 15% of disposable income (defined to be
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`income above 150% of the federal poverty line “FPL”) for up to 25 years. (The amounts are 10%
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`and 20 years for loans taken out after July 1, 2014, and the time is shortened to 10 years for
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`individuals working in public service.) See 20 U.S. Code §§ 1098e, 1087e(m)(1); 34 C.F.R.
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`§§ 682.221(b), 685.219.
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`11.
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`Yet the Federal Government seeks to evade these statutory limits by relying on
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`purported authority from older amendments to the HEA, the ICR amendments. 88 Fed. Reg.
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`43826–27 (“This statutory language clearly grants the Secretary authority to make the changes in
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`this rule related to the amount of income protected from payments, the amount of income above
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`the income protection threshold that goes toward loan payments, and the amount of time borrowers
`
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`4 https://www.studentloanplanner.com/new-repaye-plan-ten-year-cost/
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`4
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`
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`must pay before repayment ends.”). The Federal Government seeks to hike the exempt-income
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`threshold from 150% to 225%, slash the payment obligation from 15% to 5% for undergraduates,
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`and permit forgiveness after as few as 10 years instead of 25.
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`12.
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`This rule unlawfully seeks to evade the limits Congress set out in statute for the
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`IBR program. It also would gut the statutory purpose of providing loans. By their nature, loans
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`require repayment except in extenuating circumstances. The Federal Government’s thresholds are
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`set so high—arbitrarily so—that it creates a grant for most borrowers. In other words, unlike every
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`other loan program, the majority of borrowers will receive a grant. Indeed, the Federal
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`Government bragged in March that the clear majority of individuals on this new plan—57%—are
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`paying nothing. This is not a student loan program. It is a grant program that Congress never
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`authorized.
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`13.
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`As Defendant Biden once remarked, “The framers intentionally chose not to create
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`a parliamentary system of government. They meant for the President and Congress to be
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`independent of and co-equal with one another. Maintaining each of those branches as strong and
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`independent is fundamental to the Constitution's very structure--a structure they designed to
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`safeguard the liberty of the governed against abuses of power by those who govern.” Proceedings
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`of the United States Senate in the Impeachment Trial of President William Jefferson Clinton,
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`Volume IV: Statements of Senators Regarding the Impeachment Trial of President William
`
`Jeffreson Clinton, S. Doc. 106-4 (1999).5 By usurping Congressional authority to the tune of
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`hundreds of billions of dollars (if not more), and flouting the Supreme Court, Defendants seek to
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`strike a blow to the Constitution’s very structure and centralize power within the executive alone.
`
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`5 https://www.govinfo.gov/content/pkg/CDOC-106sdoc4/html/CDOC-106sdoc4-vol4.htm
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`5
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`14.
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`The President’s “Plan B” attempt to force taxpayers to pay for the debts of others
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`is no stronger than his “Plan A” attempt that was blocked last year. In fact, just days after Plaintiffs
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`announced they would file this suit, the President announced a Plan C, which his “advisers hope
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`to use the rules to begin canceling waves of student debt in the run-up to the November election.”
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`Andrew Restuccia, Biden to Make Second Attempt at Large-Scale Student Loan Forgiveness, WSJ
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`(Apr. 5, 2024).6 This Court should speedily put a stop to the President’s unlawful attempt—
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`again—to skirt Congress and the Constitution.
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`THE PARTIES
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`15.
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`Plaintiff State of Missouri is a sovereign State of the United States of America.
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`Missouri sues to vindicate its sovereign, quasi-sovereign, financial, employment, and proprietary
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`interests.
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`16.
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`Andrew Bailey is the 44th Attorney General of the State of Missouri. Attorney
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`General Bailey is authorized to bring actions on behalf of Missouri that are “necessary to protect
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`the rights and interests of the state, and enforce any and all rights, interests or claims against any
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`and all persons, firms or corporations in whatever court or jurisdiction such action may be
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`necessary.” Mo. Rev. Stat. § 27.060.
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`17.
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`Plaintiff State of Arkansas is a sovereign state of the United States of America.
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`Arkansas sues to vindicate its sovereign, quasi-sovereign, financial, employment, and proprietary
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`interests.
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`18.
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`Tim Griffin is the Attorney General of Arkansas. Attorney General Griffin is
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`authorized to “maintain and defend the interests of the state in matters before the United States
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`Supreme Court and all other federal courts.” Ark. Code Ann. 25-16-703.
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`6 https://www.wsj.com/politics/policy/biden-to-make-second-attempt-at-large-scale-student-loan-forgiveness-
`ef1da5fe
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`6
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`19.
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`Plaintiff State of Florida is a sovereign state of the United States of America.
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`Florida sues to vindicate its sovereign, quasi-sovereign, financial, employment, and proprietary
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`interests and those interests of its political subdivisions. See Florida v. Becerra, 544 F. Supp. 3d
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`1241, 1253 (M.D. Fla. 2021) (recognizing that for standing purposes the State of Florida includes
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`its political subdivisions).
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`20.
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`Ashley Moody is the Attorney General of the State of Florida. She is authorized
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`by Florida law to sue on the State’s behalf. See § 16.01, Fla. Stat.
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`21.
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`Plaintiff State of Georgia is a sovereign state of the United States of America.
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`Georgia sues to vindicate its sovereign, quasi-sovereign, financial, employment, and proprietary
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`interests.
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`22.
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`Christopher M. Carr is the Attorney General of the State of Georgia. He is
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`authorized by Georgia law to sue on the State’s behalf. GA Code § 45-15-3(6).
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`23.
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`Plaintiff State of North Dakota is a sovereign State of the United States of America.
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`North Dakota sues to vindicate its sovereign, quasi-sovereign, financial, employment, and
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`proprietary interests.
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`24.
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`Drew Wrigley is the Attorney General of North Dakota. Attorney General Wrigley
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`is authorized to “[i]nstitute and prosecute all actions and proceedings in favor or for the use of the
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`state.” N.D.C.C. § 54-12-01(2).
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`25.
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`Plaintiff State of Ohio is a sovereign state of the United States of America. Ohio
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`sues to vindicate its sovereign, quasi-sovereign, financial, employment, and proprietary interests.
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`26.
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`Dave Yost is the Attorney General of Ohio. Attorney General Yost is Ohio’s chief
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`law enforcement officer and “shall appear for the state in the trial and argument of all civil and
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`7
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`
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`criminal causes in the supreme court in which the state is directly or indirectly interested.” Ohio
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`Rev. Code § 109.02.
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`27.
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`Plaintiff State of Oklahoma is a sovereign state of the United States of America.
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`Oklahoma sues to vindicate its sovereign, quasi-sovereign, financial, employment, and proprietary
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`interests.
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`28.
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`Gentner Drummond is the duly elected Attorney General for the State of Oklahoma.
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`Being the chief law officer of the state, General Drummond is empowered “[t]o appear for the
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`state and prosecute and defend all actions and proceedings in any of the federal courts in which
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`the state is interested as a party.” OKLA. STAT. tit. 74, § 18b(A)(2).
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`29.
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`Defendants are officials of the United States Government and United States
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`governmental agencies responsible for implementing the Final Rule and the SAVE Plan.
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`30.
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`Defendant Joseph R. Biden, Jr., is the President of the United States of America.
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`He is sued in his official capacity.
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`31.
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`Defendant Miguel A. Cardona is the United States Secretary of Education (the
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`“Secretary”) and is responsible for the operation of the Department, including the issuance of the
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`challenged rule. 20 U.S.C. § 3411. He is sued in his official capacity.
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`32.
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`Defendant United States Department of Education (the “Department”) is an agency
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`of the United States government, located at 400 Maryland Avenue, S.W., Washington, D.C. 20202.
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`JURISDICTION AND VENUE
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`33.
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`This Court has jurisdiction pursuant to 5 U.S.C. §§ 701–706 and 28 U.S.C. §§ 1331,
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`1361, and 2201,
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`34.
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`This Court is authorized to award the requested declaratory and injunctive relief
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`under 5 U.S.C. §§ 702 and 706, 28 U.S.C. §§ 1361 and 2201–2202, and its inherent equitable
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`powers.
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`8
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`35.
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`Venue is proper in this district under 28 U.S.C. § 1391(b)(2) and (e)(1). Defendants
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`are United States agencies or officers sued in their official capacities. Plaintiff Missouri is a
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`resident of this judicial district, and a substantial part of the events or omissions giving rise to the
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`Complaint occur within this district.
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`36.
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`Plaintiff States Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio, and
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`Oklahoma bring this action to redress harms to their sovereign, quasi-sovereign, financial,
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`employment, and proprietary interests, including their interests under 5 U.S.C. § 702.
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`A.
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`The Higher Education Act of 1965 and Amendments
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`FACTUAL ALLEGATIONS
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`37.
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`The Higher Education Act of 1965 (“the HEA”) was enacted “to increase
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`educational opportunities and ‘assist in making available the benefits of postsecondary education
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`to eligible students in institutions of higher education.’” Biden, 143 S. Ct. at 2362 (quoting 20
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`U.S.C. § 1070(a) (cleaned up).
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`38.
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`Among other things, the HEA provided for two different forms of financial
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`assistance: grants and loans. See 20 U.S.C. § 1070-1070h, § 1071-1087-4.
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`39.
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`Initially, the HEA authorized the Federal Government only to guarantee private
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`loans. 20 U.S.C. §§ 1071 et seq. In 1993, however, Congress amended the HEA to authorize
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`direct loans from the Federal Government to students through the William D. Ford Federal Direct
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`Loan Program (“DLP”) and allowed the Department to offer plans for repayment of student loans.
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`20 U.S.C. §§ 1087a et seq.
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`40.
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`Among the repayment plans authorized by the 1993 amendments was an Income-
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`Contingent Repayment plan (“ICR”) requiring “repayment of such loan, including principal and
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`interest,” with “varying annual repayment amounts based on the income of the borrower, paid over
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`9
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`an extended period of time prescribed by the Secretary, not to exceed 25 years.” See 20 U.S.C.
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`§ 1087e(d)(1)(D). Defendants try to invoke this authority to justify their SAVE Plan.
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`41.
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`Unlike statutory authority passed years later for the “Income-Based Repayment”
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`program, this statute contains no textual authorization for cancelling loans.
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`42.
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`In 1994, the Department implemented the first income-contingent repayment plan,
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`which limited annual loan payments to 20% of a borrower’s income in excess of 100% of the
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`federal poverty line. The Department also, without explicit authorization, established by rule that
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`borrowers who had a remaining balance after 25 years of timely payments would have the
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`remaining balance forgiven. See The Federal Direct Student Loan Program, Congressional
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`Research Service, at 15 (1995).7
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`43.
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`Any incidental cancellation under that rule was small. The Government
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`Accountability Office estimated that only nine percent of borrowers participated in ICR. GAO
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`Direct Student Loans: Analysis of Borrowers’ Use of Income Contingent Repayment Option 7
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`(1997).8 And of that subset, the Department estimated that only “approximately 12% of
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`[participating] borrowers would not [fully] repay within the 25-year period.” Id. at 11. That meant
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`that, consistent with the statutory purpose of the ICR in obtaining “repayment of such loan,
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`including principal and interest,” 20 U.S.C. § 1087e(d)(1), nearly everybody was expected to pay
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`their loans: only about 1 percent of borrowers received some cancellation of debt.
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`44.
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`In 2007, Congress determined that the income-contingent program was not
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`sufficiently protective, so it enacted three significant changes to the HEA.
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`45.
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`First, Congress established an updated program, called the Income-Based
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`Repayment (“IBR”) plan—which became available in addition to the income-contingent
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`7 https://files.eric.ed.gov/fulltext/ED378875.pdf
`8 https://www.gao.gov/assets/hehs-97-155.pdf
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`10
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`
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`repayment plan. This new program provided relief for borrowers facing a temporary “financial
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`hardship” by increasing the exempt-income threshold from 100% of the federal poverty line to
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`150% and decreasing the annual repayment cap from 20% to 15% of disposable income. See 20
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`U.S.C. § 1098e(a)(3)(B), (b)(1). Eligibility for this program remains only “during any period the
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`borrower has the partial financial hardship,” id., as that term is defined in 20 U.S.C. § 1098e(a)(3).
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`46.
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`Second, unlike with the ICR program, Congress included statutory text expressly
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`giving the Department authority to cancel debt. Id. § 1098e(b)(7). The Secretary was directed to
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`“cancel any outstanding balance” for persons under the IBR program who have met certain
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`requirements, including payment for a period of time “not to exceed 25 years.” Id. For the first
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`time, Congress also expressly authorized forgiveness for persons who have “made payments under
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`an income-contingent repayment plan,” but only if those borrowers joined the income-based
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`repayment plan. Id. § 1098e(b)(7)(A), (b)(7)(B)(iv) (emphasis added). The statute does not
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`contain authorization for persons who are on ICR plans only.
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`47.
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`Third, the IBR program (unlike the ICR program) expressly authorizes the
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`Secretary to subsidize the interest of borrowers—but only for a limited time. If the amount of a
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`borrower’s monthly payment under the program is not sufficient at that time to cover monthly
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`interest, then the Secretary must, “on subsidized loans,” pay the difference between the borrower’s
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`payment and the interest due that month. § 1098e(b)(3). But the Secretary may do so only during
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`the first 3 years after the borrower elects to participate in the IBR program. Id. In contrast, the
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`ICR provisions expressly permit the Secretary only to “limit[ ] the amount of interest that may be
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`capitalized.” § 1087e(e)(5). In other words, borrowers under the ICR program still must pay the
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`interest. They may simply avoid the interest becoming capitalized into the principal.
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`11
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`48.
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`The 2007 amendments also established the Public Service Loan Forgiveness
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`(“PSLF”) program. Under the PSLF, the Secretary was granted the authority to “cancel the balance
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`of principal and interest” of borrowers who made 120 eligible monthly payments while employed
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`in a “public service job.” See 20 U.S.C. § 1087e(m)(1). By reducing the statutory amount of time
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`to receive forgiveness from 25 years to 10, this program offered a powerful incentive to pursue
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`public service employment.
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`49.
`
`The last significant statutory amendments to loan repayment statutes were made in
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`2010. That year, the President urged Congress to pass a “bill” to make IBR more generous by
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`lowering the payment cap to 10% (from 15%) of income above 150% of the federal poverty
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`guideline and ensure that “debt will be forgiven after 20 years,” down from 25 years under IBR.
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`Barack Obama, Remarks by the President in State of the Union Address at 5 (Jan. 27, 2010).9 The
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`President did not lay claim to being able to accomplish those changes unilaterally. Instead, the
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`President “urge[d] the Senate to follow the House and pass a bill” to that effect. Id.
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`50.
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`Congress did so in the Health Care and Education Reconciliation Act of 2010 but
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`expressly restricted the amended terms to “new borrower[s] on or after July 1, 2014.” 20 U.S.C.
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`§ 1098e(e).
`
`51. While Congress has set specific statutory limits on loan forgiveness, the
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`Department has routinely tried to exercise power to lower the eligibility thresholds. Moreover, the
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`Department has unilaterally overridden some of these provisions in the rulemaking process to
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`make them higher. For example:
`
`i.
`
`In 2012, the Department established the Pay as You Earn (PAYE) plan, which
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`retroactively extended the 2010 statutory amendments to loans taken out as far
`
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`9 https://www.govinfo.gov/content/pkg/DCPD-201000055/pdf/DCPD-201000055.pdf
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`12
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`
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`back as 2007, despite statutory language stating that the amendments should
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`apply only to loans taken out after July 1, 2014. See 77 Fed. Reg. 66,088.
`
`ii.
`
`In 2015, the Department established the REPAYE plan, extending the 2010
`
`amendments to all borrowers regardless of when they took out the loans. 80
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`Fed. Reg. 67,204.
`
`52.
`
`Even with the Department’s changes, the average individual borrower under the
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`REPAYE plan would still ultimately pay back more than the amount that they took out in loans.
`
`88 Fed Reg. 43,880.
`
`53. While the HEA includes a variety of provisions allowing the secretary to
`
`promulgate regulations for income-driven repayment and other repayment programs, no provision
`
`of the HEA delegates to the Secretary authority to convert a student “loan” program into what is
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`effectively a student “grant” program for the majority of borrowers. By statute, loan forgiveness
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`is supposed to be the exception, not the rule—an acknowledgment that writing off bad loans is
`
`unavoidable in any industry. Nor does the HEA include authority for the Department to use the
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`ICR program to evade the statutory limits of the IBR program.
`
`B.
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`Congressional Inaction and Defendants’ Failed Attempt at Mass Cancellation
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`54.
`
`Congress has not enacted any substantial amendments to the HEA, or otherwise
`
`passed laws providing amending the treatment of student debt, since 2010. But that does not mean
`
`that Congress has left the issue un-considered.
`
`55.
`
`In July 2019, Senator Elizabeth Warren introduced the Student Loan Debt Relief
`
`Act of 2019, a bill that would have automatically canceled $50,000 of student loan debt for those
`
`
`
`
`13
`
`
`
`Case: 4:24-cv-00520-JAR Doc. #: 1 Filed: 04/09/24 Page: 14 of 62 PageID #: 14
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`
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`who make under $100,000. Congress chose not to pass the bill. See Student Loan Debt Relief Act
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`of 2019, S. 2235, 116th Cong. (2019).10
`
`56.
`
`In March 2021, Representative Al Lawson introduced the Income-Driven Student
`
`Loan Forgiveness Act, which would have cancelled the outstanding balance on loans for all
`
`borrowers under a certain income cap. See Income-Driven Student Loan Forgiveness Act, H.R.
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`2034, 117th Cong. (2021).11 Congress chose not to pass the bill.
`
`57.
`
`Frustrated by their lack of success in the legislative arena, some members of
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`Congress then began to assert that the President could skirt Congress and cancel loans through
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`executive action. In February 2021, Senators Elizabeth Warren and Chuck Schumer and
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`Representatives Alma Adams, Ilhan Omar, and Mondaire Jones introduced resolutions asserting
`
`that the Biden Administration has statutory power to cancel student debt immediately. Elizabeth
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`Warren, Warren, Schumer, Pressley, Colleagues: President Biden Can and Should Use Executive
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`Action to Cancel up to $50,000 in Federal Student Loan Debt Immediately (Feb. 4, 2021).12
`
`58.
`
`But even this unbinding resolution was too controversial to pass. The Senate
`
`resolution was signed by 20 members and still failed. S.R. 46, A Resolution Calling on the
`
`President of the United States to Take Executive Action to Broadly Cancel Federal Student Loan
`
`Debt, 117th Congress (2021).13 The same is true of the House resolution, which was signed by 68
`
`members of the House but was not popular enough to get a vote. H.R. 100, Calling on the
`
`President of the United States to Take Executive Action to Broadly Cancel Federal Student Loan
`
`Debt, 117th Cong. (2021).14
`
`
`10 https://www.congress.gov/bill/116th-congress/house-bill/3887
`11 https://www.congress.gov/bill/117th-congress/house-bill/2034
`12 https://www.warren.senate.gov/newsroom/press-releases/warren-schumer-pressley-colleagues-president-biden-
`can-and-should-use-executive-action-to-cancel-up-to-50000-in-federal-student-loan-debt-immediately
`13 https://www.congress.gov/bill/117th-congress/senate-resolution/46
`14 https://www.congress.gov/bill/117th-congress/house-resolution/100
`
`
`
`
`14
`
`
`
`Case: 4:24-cv-00520-JAR Doc. #: 1 Filed: 04/09/24 Page: 15 of 62 PageID #: 15
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`
`
`59.
`
`Still, the resolutions had their desired effect. On August 24, 2022, the
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`Administration announced that, under the HEROES Act, it would cancel $10,000 to $20,000 in
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`student debt for all borrowers who have loans owned by the Department and whose annual income
`
`was less than $125,000 (or $250,000 for married borrowers who file jointly). FACT SHEET:
`
`President Biden Announces Student Loan Relief for Borrowers Who Need It Most, The White
`
`House (Aug. 24, 2022).15
`
`60.
`
`The Wharton School of the University of Pennsylvania released a study concluding
`
`that the Department’s Mass Debt Cancellation would cost up to $519 billion over ten years, and
`
`the overall cost could rise to more than $1 trillion when factoring in the other components of the
`
`Department’s announcement. See The Biden Student Loan Forgiveness Plan: Budgetary Costs
`
`and Distributional Impact, Penn Wharton University of Pennsylvania (Aug. 26, 2022).16
`
`61.
`
`On September 29, 2022, six states—including Plaintiff States Missouri and
`
`Arkansas here—sued in federal court to block that unlawful executive action. They were
`
`successful.
`
`62.
`
`In Biden v. Nebraska, the Supreme Court rejected Defendants’ assertion that they
`
`could use a vague provision of the HEROES Act as authority to transfer half a trillion dollars in
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`wealth from taxpayers to student loan borrowers. 143 S. Ct. 2355.
`
`63.
`
`In holding that “the HEROES Act provides no authorization for the Secretary’s
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`plan,” the Supreme Court also found that “the ‘economic and political significance’ of the
`
`Secretary’s action is staggering by any measure.” Id. at 2373 (citing West Virginia v. EPA, 597
`
`U.S. 697 (2022) (cleaned up)). Beyond “the ordinary tools of statutory interpretation,” the
`
`
`15 https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-
`student-loan-relief-for-borrowers-who-need-it-most/
`16 https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness
`
`
`
`
`15
`
`
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`Case: 4:24-cv-00520-JAR Doc. #: 1 Filed: 04/09/24 Page: 16 of 62 PageID #: 16
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`
`
`Defendants’ efforts were unlawful because “the basic and consequential tradeoffs inherent in a
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`mass debt cancellation program are ones that Congress would likely have intended for itself.” Id.
`
`at 2375 (cleaned up).
`
`64.
`
`The ruling confirmed what the Democratic Speaker of the House had already
`
`professed: “People think that the President of the United States has the power for debt forgiveness.
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`He does not. . . . That has to be an act of Congress. . . . The President can’t do it.” See Lauren
`
`Camera, Pelosi: Biden Lacks Authority to Cancel Student Debt, U.S. News & World Report (July
`
`28, 2021).17
`
`C.
`
`The Proposed Rule
`
`65.
`
`After the six States sued over the August 2022 rule, the President’s administration
`
`began working feverishly on a Plan B. On January 11, 2023, just one month after the Supreme
`
`Court granted certiorari in Biden v. Nebraska, Defendant Department issued the Proposed Rule,
`
`entitled, “Notice of Proposed Rulemaking on Improving IDR for the Direct Loan Program.” See
`
`88 Fed. Reg 1894.
`
`66. The Proposed Rule was characterized as an effort “to amend the regulations
`
`governing income-contingent repayment plans by amending the Revised Pay as You Earn
`
`(REPAYE) repayment plan, and to restructure and rename the repayment plan regulations under
`
`the William D. Ford Federal Direct Loan (Direct Loan) Program, including combining the Income
`
`Contingent Repayment (ICR) and the Income-Based Repayment (IBR) plans under the umbrella
`
`term of ‘Income-Driven Repayment (IDR) plans.’” Id.
`
`67. The Proposed Rule required that any and all comments must be submitted “on or
`
`before February 10, 2023,” id., a mere thirty days later.
`
`
`17 https://www.usnews.com/news/education-news/articles/2021-07-28/pelosi-bide