HomePoliticsSix GOP-led states sue Biden administration over student loan forgiveness

Six GOP-led states sue Biden administration over student loan forgiveness

Six Republican-led states are suing the Biden administration in an effort to stop his plan to forgive the student loan debt of tens of millions of Americans, accusing him of overstepping his executive powers.

It is at least the second legal challenge this week to the sweeping proposal put forth by President Biden in late August, when said his administration would write off up to $20,000 in education debt for a large number of borrowers. The announcement, after months of internal deliberations and pressure from Liberal activists, became immediate political material ahead of November’s midterm elections and fueled Tory arguments over legality.

In the lawsuit, which was filed Thursday in federal court in Missouri, the Republican states argue that Biden’s cancellation plan is “not remotely designed to address the effects of the pandemic on federal student loan borrowers,” as it is required by the 2003 federal law that the administration is using as legal justification. They point out that Biden, in an interview with CBS’s “60 Minutes” this month, declared that the Covid-19 pandemic was over, but still uses the ongoing health emergency to justify large-scale debt relief.

“It is patently unfair to saddle working Americans with the loan debt of those who chose to go to college,” Arkansas Attorney General Leslie Rutledge, who heads the group, said in an interview.

He added: “The Department of Education is required by law to collect the balance due on loans. And President Biden does not have the authority to override that.”

The states of Iowa, Kansas, Missouri, Nebraska and South Carolina joined Arkansas in filing the lawsuit. Iowa has a Democratic attorney general, but the state’s Republican governor, Kim Reynolds, signed on behalf of the state. The states argue that the Missouri loan servicer faces “continuing financial harm” from Biden’s decision to cancel the loans. Other states that have joined the lawsuit argue that Biden’s pardon plan will ultimately cut off revenue to state coffers.

Biden’s forgiveness program will cancel $10,000 in student loan debt for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate greater financial need, will receive an additional $10,000 of debt forgiveness.

The administration also said it would extend the current pause on federal student loan payments, suspended near the start of the pandemic more than two years ago, once again through the end of the year.

The administration faced threats of legal challenges to its plans almost immediately, with conservative lawyers, Republican lawmakers and business-oriented groups claiming that Biden was overstepping his authority by taking such sweeping steps without the consent of Congress.

Democratic lawmakers fighting tough reelection races also distanced themselves from the student loan plan, as Republican officials called it an unfair government giveaway to the relatively wealthy at the expense of those who did not go to college.

In their lawsuit, the Republican attorneys general also contend that the pardon program violates the Administrative Procedures Act, which sets out how federal agencies must make regulations to ensure executive branch policies are well reasoned and explained.

“The president has no authority to put himself in the shoes of Congress,” Rutledge said in the interview. “These actions must be taken by Congress and he cannot override that.”

To justify the legality of the plan, the Biden administration relies on a post-September 1 report. Law of January 11, 2001 intended to help members of the armed forces that, according to the Department of Justice, allows Biden to reduce or erase student loan debt during a national emergency. But Republicans argue the administration is misreading the law because, in part, the pandemic no longer qualifies as a national emergency.

Another lawsuit against Biden’s student loan program was filed this week in federal court in Indiana by the Pacific Legal Foundation, a libertarian legal advocacy group that employs a lawyer who says he would be harmed by the forgiveness plan. The attorney, Frank Garrison, says erasing his current debt load will trigger a tax liability from the state of Indiana, which is among at least a half-dozen states where forgiven loan amounts will be subject to state taxes.

The White House dismissed the lawsuit as unfounded because any borrower who doesn’t want debt relief can opt out. The Department of Education is still on track to submit the waiver plan application in early October.

Republicans have also seized on the price of the Biden plan and its impact on the nation’s budget deficit. The Congressional Budget Office said this week that the program will cost about $400 billion over the next three decades. The White House countered that the CBO’s estimate of how much the plan will cost in its first year alone, $21 billion, is lower than the administration initially believed.

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