Were You Looking Forward To Student Loan Forgiveness? Have A Koch And A Frown.

The billionaire-funded 'Pacific Legal Foundation' strikes again.

Yesterday, a lawsuit was filed in federal court to block the Biden administration's plan to forgive $10,000 in federal student loan debt for folks with qualifying loans and income of less than $120,000 a year. (For married couples, double that.) The plan also offers an additional $10,000 in loan forgiveness to folks who received Pell grants, to target borrowers who were more likely to come from low-income families.

The lawsuit was filed by a dude named Frank Garrison who works for the Pacific Legal Foundation, an outfit described by CNN as a "a nonprofit libertarian law firm," and which is handling the lawsuit on Garrison's behalf. The Washington Post similarly describes the foundation as "a conservative public interest law firm in California."

But as Judd Legum points out in his Popular Information newsletter.

But what you will not learn from either story is that the Pacific Legal Foundation receives extensive funding from right-wing billionaires. And this "public interest law firm" has a record of filing lawsuits that advance its donors' economic and ideological interests.

Among the PLF''s major donors are entities controlled by right-wing billionaire Charles Koch, CEO of Koch Industries. A Popular Information review of tax filings from 2019 and 2020, the latest available, found that the Charles Koch Foundation and the Charles Koch Institute donated $2,331,550 to PLF in those two years.

Oh, my, that does seem rather important to mention. But what about the Charles Koch Fund, the Charles Koch League, and the Charles Koch Society for the Advancement Of Charles Koch?

Legum also notes that the PLF gets funding from other rightwing foundations, like the Sarah Scaife Foundation and the Harry Bradley Foundation. The group also " reportedly receives major funding from Richard Uihlein, the right-wing billionaire that owns the office supply company Uline." Uihlein is a big political player in the Midwest, where he has funded pet Senate candidates and efforts to restrict LGBTQ+ rights. So we're talking a very narrow segment of the "public" in PLF's "public interest" law practices.

Legum points out, however, that the lawsuit against loan forgiveness faces a few hurdles, mainly because to have standing to sue, the plaintiff needs to show not just that they think a government action is bad and wrong and will sap the vitality of the American people's precious bodily fluids — they also have to show that they have been harmed by the policy, which is a big ask when you're talking about a plan to relieve people's student debts. How is someone else getting up to $20,000 damaging to this Frank Garrison fellow, henngggh? 

The lawsuit claims, however, that Garrison will be harmed by having $20,000 of his own debt forgiven, as Legum explains:

The lawsuit says that Garrison "financed his college education using federal student loans" and was a Pell Grant recipient. Garrison says he is currently enrolled in another program called Public Service Loan Forgiveness (PSLF). Under that program, people working in a public interest capacity can have their loans forgiven after making 120 payments.

Garrison also says he lives in Indiana, which does not tax loans forgiven under the PSLF but does tax loans forgiven in other ways, including under Biden's new program. So Garrison says that the program will require him to pay "a state income tax liability of more than $1,000 for 2022" even though "a $20,000 reduction in his total indebtedness will not change either his monthly payment obligation or the total amount of the loans he must repay." This, the lawsuit states, gives Garrison standing.

We should also point out here that, thanks to tricksy Democrats, the American Rescue Plan exempted any future federal loan forgiveness from federal taxes. But apparently coming out $19,000 ahead, in Indiana, would be a great injury.

That's hardly a slam-dunk argument, however, since the actual details of the loan forgiveness program have yet to be published. In a statement, White House Assistant Press Secretary Abdullah Hassan called the claim "baseless" because the program won't oblige anyone to accept loan forgiveness if they'd rather have their debt.

No one will be forced to get debt relief. Anyone who does not want debt relief can choose to opt out. [...]

Why would this group bring this baseless claim? Because opponents of the debt relief plan are trying anything they can to stop this program that will provide needed relief to working families.

That really would make it difficult to argue you've been harmed, for sure.

Also too, Legum points out, there's some question about whether Garrison really is an Indiana resident, which is fairly important for the claim of standing, since

Indiana is one of the few states that would tax student loan forgiveness provided by Biden's program.

But, until Tuesday morning, PLF's website said that Garrison was based in Washington, DC . Up until very recently, Garrison's LinkedIn page said the same thing.

Look, America is a very mobile country, and if New Jersey resident Mehmet Oz can suddenly become a Pennsylvania resident to run for Senate, why can't a DC lawyer for a rightwing legal outfit put in a change of address form so he can be "injured" by loan forgiveness he doesn't have to accept?

Legum also identifies a great big logical contradiction in the PLF lawsuit and its suggested solution:

The lawsuit argues that Garrison has standing because he would pay $1,000 more than he would otherwise. But the "solution" they offer to this problem is for millions of people to pay tens of thousands of dollars more.

We aren't sure that's a major problem, however, since courts in the post-Trump era are no longer required to consider logic or the impacts of litigation on actual people. The important thing is that the Founders never said anyone could be forgiven their debts as they forgive their debtors, because that's not in the Constitution, now is it?

[ Popular Information / CNN / WaPo / Insider / Image generated by DreamStudio Lite AI]

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