[colinsane]

i think for a lot of us it came out of left field: i assumed our congress was too divided to pass something of this sort, so i never really sorted out my thoughts on the actual idea.

turns out i neglected to consider that loan forgiveness could happen without congress. my jerk reaction was fairly negative: not because i had thought critically about loan forgiveness, but because at a certain level i recognized that we just engaged in a very large act of redistribution almost completely outside the democratic process, and it’s hard to move past that mental shock and confront the outcomes objectively and separate from the process.

[zaroth]

It probably can’t happen without congress. But can you even imagine the shitshow when half a trillion in debt that was wiped out somehow has to be put back on the books?!

[akvadrako]

It seems like it can happen without congress. I agree it's illegal, but the issue is that nobody has standing to bring a lawsuit to the courts:

https://news.ycombinator.com/item?id=32623433

[jkaplowitz]

The article linked there is a pretty good analysis of the obstacles to challenging it in federal court just by virtue of the action occurring, but it doesn't foreclose all possibilities. (And it's not obviously illegal to me, but that's irrelevant to the standing question.)

Imagine this scenario: A loan servicer neglects to adjust the amount a student loan borrower owes based on this action (or views it as illegal and intentionally doesn't adjust it), and bills the old amount.

If the borrower pays the higher amount, they may have standing to reclaim the overpayment under the argument that it was validly canceled. If they are not in the same state as the servicer, diversity jurisdiction might allow this to occur in federal court, and this overpayment is probably sufficiently concrete, particularized, and personal to generate Article III standing.

If the borrower pays the Biden-adjusted lower amount, then debt collection efforts may start and there may be a credit report impact, when with correct servicer implementation of the cancelation no debt would be sent to collections. There are all sorts of opportunities for standing to be created here, such as if a federal or state debt collection statute is violated by the servicer or if the borrower has another financial consequence (like a refused or higher-rate mortgage) from the inaccurately reduced credit score.

If any of this manages to land in state court, standing requirements can constitutionally be weaker anyway depending on the requirements of the state constitution.

So, we'll see, but it can probably be tested in the courts somehow, unless the Administrative Procedure Act rules somehow preempt any other lawsuit at all from using "Biden's action was illegal" as an argument in the service of some other cause of action.