Navient CEO Jack Remondi has said he will not sue Biden over his student loan forgiveness plan.
However, he noted that his company would have standing to sue.
Some Republican lawmakers have expressed their intention to pursue legal action to block the relief.
The head of a major student loans company has said he could pursue President Joe Biden’s recent debt relief – but won’t.
At Barclay’s global financial services conference this week, student loan company Navient CEO Jack Remondi joined in to discuss Biden’s recent $20,000 loan forgiveness. announcement end of August. It was a long-awaited move — Biden has pledged to approve $10,000 in campaign relief — but nonetheless controversial, given that many Republicans have pushed back on relief since the president took office.
After the announcement, conservatives turned that pushback into threats of legal action, with prominent lawmakers like Texas Senator Ted Cruz saying they were looking for ways to take debt relief to court and try to block it. Remondi responded to those threats and said Navient would “clearly” have the legal standing to challenge the policy because it holds loans under the federal Family Education Loans (FFEL) program. Borrowers who would not directly benefit from the relief since the loans are held by individuals, so they would need to consolidate their federal debt loans to qualify. This would significantly affect Navient’s business.
But on whether Navient will actually sue, Remondi said, “It won’t be us.”
“We have no direct knowledge of who would or would not sue,” Remondi said. “It’s pretty clear that the precedent here requires someone to have standing to sue. We would clearly have standing to act as a holder of FFELP loans, but it’s not clear whether a political entity that could have standing in their state because of a decision the state agency that holds the FFELP loans will decide whether to pursue legal action.”
Remondi also agreed with a question that noted that “a lot of people are hoping someone else is going to sue, but it’s unclear who is going to step in and fight this political battle.”
This is something that many people wonder. Top House Education Committee Republican Virginia Foxx said at an event this week that she is “open to suggestions” on ways to block Biden’s loan forgiveness in court.
“At the moment, we don’t know exactly what will happen,” she said. “But we think there will be actions that will be able to stop it. And we’re working as hard as we can to find out what it’s going to be.”
The Biden administration said it has the authority to enact this one-time blanket relief under the HEROES Act of 2003, which gives the Secretary of Education the ability to waive or change student loan balances in relation to a national emergency, such as COVID-19 . However, Republicans have argued that the policy is an excess of that authority.
Abby Shafroth, attorney at the National Consumer Law Center, also already said Insider that it will be difficult to find a plaintiff who can successfully fight Biden’s debt relief in court – especially when it comes to companies that handle student loans, as they make money from to contracts with the government.
“Do they want to bite the hand that feeds them? Shafroth said. “Also, I think the administration is in regular contact with the service agents and talking to them about what the administration is doing, and trying to find ways to design relief programs that are not really going to disrupt their services. So I think there are a lot of pragmatic reasons why I wouldn’t expect a repairman to bring in a suit.”
Read the original article at Business Intern