I paid off my student loans myself. If Biden announces Federal Student Loan forgiveness, am I owed money?

Question

"Biden to Announce Decision on Student Loan Debt, Affecting Millions of Borrowers."

I owed $40,000 in student loans, and paid them off by working two and three jobs at a time for many years. If Biden announces he is forgiving $10,000 of student loans, am I owed money? It certainly seems fair that I should receive a check in the mail for $10,000.

Is there any legal recourse to this announcement? If a $10,000 forgiveness is announced, is there a basis for a class action lawsuit against the Federal Government?

Answer 1

You have no injury and so no basis for a suit, unless your claim is that the educational institutions you attended were fraudulent (in which case you'd most likely sue them, or try to petition the government for existing relief procedures for such cases). Since you don't, you have no injury.

All parties entered their loans under the understanding that paying them off was necessary and potentially long term and arduous. The government forgiving amounts on existing loans does no injury to those who already paid. There is no injury in you having done what you agreed to do, in accordance with governing laws. Forgiving some debt for some people is just an act of executive largesse, and does not hurt you in any legally cognizable form.

Indeed, it could be said that you have benefitted from having paid them off. For since doing so you have no longer been burdened by them, saving you both money and potential credit score or even legal issues, whereas those who still have debt are still so burdened. Plus paying them off yields benefits in your credit score and general loan worthiness; you can expect to have been able to get meaningfully better interest rates than someone identical to you but with substantial student debt. These are all benefits nobody who gets forgiveness will retroactively receive. At best, going forward they will get to be on similar footing as you. And having more people on the same beneficial footing as you is not a legally cognizable injury in fact to you.

Answer 2

There is (probably) no clearly announced constitutional right that will have been violated by this action, whatever it actually turns out to be, so you can't sue the government under the Federal Tort Claims Act. However, it is also not clear that POTUS has the legal authority to cancel debts. The probable legal leverage is 20 USC 1082(a)(6) where the Sec'y of Education may

enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.

However, §1071 limits the amount of money that can be so spent. The government has to cover any unpaid loans (the government cannot just take the money from lenders without a repeal of the Taking Clause), which means the government i.e. Congress must authorize the requisite appropriations – POTUS cannot appropriate.

Since we don't know what the order will say, we can't judge whether any existing forgiveness program might encompass this particular plan.

Answer 3

If Biden announces he is forgiving $10,000 of student loans, am I owed money? It certainly seems fair that I should receive a check in the mail for $10,000.

No. "It certainly seems fair" is not the measure by which laws are deemed valid or not.

Is there any legal recourse to this announcement?

No.

If a $10,000 forgiveness is announced, is there a basis for a class action lawsuit against the Federal Government?

No.

Someone receiving a benefit from the government is not a legally cognizable harm to you.

Even if the law or order was blatantly illegal, you and people similarly situated to you would lack standing to bring a lawsuit challenging such a federal government action simply because you were similarly situated at some time in the past and did not benefit from the law or ruling that did not yet exist at that time.

Laws and executive orders are not retroactive unless they say so, and are not required by law to be retroactive in effect. Indeed, sometimes laws with retroactive effect, called "ex post facto" laws are unconstitutional.