- Navient CEO Jack Remondi has said he will not sue Biden over his student loan forgiveness plan.
- “It seems like a lot of people are hoping someone else will sue,” Remondi said.
- 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 in late 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 Sen. 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 operates the Federal Family Education Loan (FFEL) program. Borrowers under this would not directly benefit from the relief since the loans are held by individuals, so they would have to consolidate their loans into federal debt to be eligible. 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 FFEL loans, but it’s not clear whether a political entity that could have standing in their state due to a state agency that FFEL Loan Houses will decide whether or not to file a lawsuit.”
“It seems like a lot of people are hoping someone else will sue, but it’s unclear who is going to step in and fight this political battle,” he added.
This is something that many people wonder. The House Education Committee’s top Republican, Virginia Foxx, said at an event this week that she was “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 has 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 related with a national emergency, like COVID-19. However, Republicans have argued that the policy is an excess of that authority.
Abby Shafroth, an attorney for the National Consumer Law Center, also told Insider that it would be difficult to find a plaintiff who could successfully fight Biden’s debt relief in court — especially when it comes to businesses. who manage student loans since they earn money through contracts with the government.
“Do they want to bite the hand that feeds them? said Shafroth. “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.”