Biden Hit With Another Lawsuit Over Student Loan Plans - Tucker
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Biden Hit With Another Lawsuit Over Student Loan Plans

Six red states filed a legal challenge to President Joe Biden’s announced plan to forgive up to $20,000 of student debt.

Iowa, Kansas, Missouri, Nebraska, South Carolina and Arkansas allege the Biden administration overstepped its executive powers to cancel some student loans. The states claim the Biden measure is not tailored to redress pandemic effects on student borrowers as the law cited by him requires.

At least one state further claims economic harm because loan servicers located within the state would lose money from unrealized interest on owned loans.

Fox News further reported:

President Joe Biden said in August his administration would cancel up to $20,000 in student loan debt for tens of millions of Americans, leading conservatives to question the legality of the plan and the political motivation of the move given that the midterm elections are coming up.

But the administration this week quietly scaled back eligibility requirements for the debt relief. Now, borrowers with loans guaranteed by the federal government but held by private lenders are ineligible for debt cancelation, according to the Education Department.

The department updated its website Thursday to say that borrowers with federal loans owned by private banks will now be ineligible under Biden’s plan unless they consolidated their loans into the government’s direct lending program before Thursday. The change will impact about 770,000 borrowers, the department said.

The GOP states argue in the lawsuit, filed Thursday in a federal court in Missouri, that Biden’s plan is “not remotely tailored to address the effects of the pandemic on federal student loan borrowers,” which is required under the 2003 federal law the administration is using to claim its legality. 

“It’s patently unfair to saddle hard-working Americans with the loan debt of those who chose to go to college,” Arkansas Attorney General Leslie Rutledge, who is leading the lawsuit, said in an interview.

“The Department of Education is required, under the law, to collect the balance due on loans. And President Biden does not have the authority to override that,” she continued.

The lawsuit said Missouri’s loan servicer is facing a number of “ongoing financial harms” due to the student loan forgiveness.

The states allege that Missouri’s loan servicer will lose revenue from loans it owns through the Federal Family Education Loan Program, which had allowed private banks to authorize and manage federally backed student loans until the program ended in 2010.

The administration maintains its belief that the forgiveness program sits on solid legal ground.

“Republican officials from these six states are standing with special interests, and fighting to stop relief for borrowers buried under mountains of debt,” White House spokesman Abdullah Hasan said Thursday. “The president and his administration are lawfully giving working and middle-class families breathing room as they recover from the pandemic and prepare to resume loan payments in January.”

Biden’s plan will cancel $10,000 in student loan debt for people making less than $125,000 or households making less than $250,000. Borrowers who meet the income limit and received a Pell Grant, aid given to applicants most in need financially, will have a total of $20,000 in debt forgiven.

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