Where a U.S. District Court judge dismissed a complaint challenging the Department of Education’s decision to implement a one-time account adjustment that would count months or years that borrowers spent in excessive forbearance status toward debt forgiveness, the plaintiff lacks standing, so the dismissal order should be affirmed.
“Many people consider a college education the ticket to the American dream. Some take out student loans to get the ticket. Paying back those loans can turn into a nightmare. Congress and the U.S. Department of Education stepped in to help by creating income-driven student-loan repayment plans and the Public Service Loan Forgiveness program.
“Various problems arose with these plans, including student-loan servicers steering borrowers into postponing or reducing their student-loan payments for extended periods of time. In response, the Department of Education announced, in April 2022 and July 2023, a one-time account adjustment that would count months or years that borrowers spent in excessive forbearance status toward debt forgiveness. The Mackinac Center for Public Policy and the Cato Institute did not take kindly to the Department of Education’s action, so they sued to stop it. The question presented is whether Plaintiffs’ complaint sufficiently alleged that they suffered an injury in fact resulting from the adjustment based on competitor standing and deprivation of a procedural right. We hold that it does not. We thus affirm the district court’s dismissal of Plaintiffs’ complaint for lack of subject-matter jurisdiction.
“Plaintiffs have not alleged any facts showing how the adjustment affects their ability to ‘recruit and retain college-educated employees.’ ... They have not identified any current employee that has received credit under the adjustment, nor do they claim that they expect to imminently hire any employee who has received such credit. Furthermore, they have not alleged that any employees have stopped working for them (or stated an intention to do so) based on the adjustment. And they have not identified their competitors beyond saying private employers that hire college-educated workers. As such, they have failed to sufficiently plead that they have suffered an injury in fact.
“At bottom, how the adjustment impacts Plaintiffs is up to individuals who are not parties to this lawsuit. Plaintiffs have not pointed to any case holding that competitor standing exists to challenge the government’s provision of benefits to third parties. Further, ‘most competitor standing cases depend on [] core economic postulates,’ and Plaintiffs’ allegations regarding supply and demand and the impact of financial incentives on third-party student-loan debtors are wholly speculative. ... Therefore, Plaintiffs have not ‘suppl[ied] the link between the challenged conduct and increased competition,’ and they cannot establish an injury in fact through competitor standing.
“Because Plaintiffs failed to show that they suffered an injury in fact for any of the claims they asserted, the district court lacked subject-matter jurisdiction to adjudicate their claims.”
Mackinac Ctr. for Pub. Policy v. Cardona; MiLW 01-108020, 17 pages; U.S. Court of Appeals for the Sixth Circuit; Mathis, J., joined by Siler, J., Cole, J.; on appeal from the U.S. District Court for the Eastern District of Michigan at Bay City; Sheng Li for appellants; Thomas Pulham for appellees.
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