Seven conservative dominant states filed a lawsuit on Tuesday to challenge President Joe Biden’s administration’s most recent student debt forgiveness plan.
They say the U.S. Department of Education was taking steps to begin canceling loans as early as this week. The lawsuit was filed less than a week after the U.S. Supreme Court rejected the Biden administration’s attempt to revive a different student debt relief plan.
27.6 Million Borrowers
The plan knocked back by the Supreme Court was meant to speed up loan forgiveness for some borrowers and reduce monthly payments for millions of borrowers.
State attorneys general took aim at a rule the Education Department proposed in April that would allow an estimated 27.6 million borrowers to waive their federal student loan debts in a lawsuit filed in federal court in Brunswick, Georgia.
Hundreds of Billions of Dollars
Attorney generals from states including Georgia and Missouri say they recently acquired reports showing the Education Department has told federal loan servicers to start canceling hundreds of billions of dollars of loans as soon as Tuesday or Saturday before the finalization of the rule.
The lawsuit stated that this could result in the immediate cancellation of at least $73 billion worth of loans, as well as billions more in additional debt relief.
“Successfully Halted”
The states contend the Education Department has no authority to greenlight such debt forgiveness.
According to Missouri Attorney General Andrew Bailey, “We successfully halted their first two illegal student loan cancellation schemes; I have no doubt we will secure yet another win to block the third one.”
“Continue to Fight”
The Education Department said it “will continue to fight for borrowers across the country who are struggling to repay their federal student loans,” but did not release any further comment on the matter.
Under Biden’s leadership, the department has already granted $169 billion in debt relief to nearly 4.8 million individuals.
Latest Legal Challenge
The latest legal challenge to the Democratic president’s efforts to fulfill a campaign promise and alleviate debt for millions of Americans who used federal student loans to pay for expensive higher education comes in the form of the lawsuit.
Republican-led states effectively persuaded the 6-3 conservative majority U.S. Supreme Court in June 2023 to hinder a $430 billion program supported by Biden that would have dropped up to $20,000 in debt per borrower for up to 43 million Americans.
SAVE Targeting
The administration then pursued a different program known as the Saving on a Valuable Education, or SAVE, plan.
This plan was intended to reduce the monthly payments of millions of borrowers and expedite the forgiveness of some loans. However, despite ongoing litigation, Republican-led states convinced a federal appeals court to reject that plan.
Higher Education Act
The High Court on Aug. 28 declined to lift the directive on rejecting the plan.
The most recent plan depends on another statute, a provision of the Higher Education Act that some leading Democrats including U.S. Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren have long contended gives the administration the power to cancel student debt.
Lawsuit Supporters
Joining Missouri’s Bailey were Georgia, Alabama, Arkansas, Florida, North Dakota, and Ohio.
According to the lawsuit, Education Secretary Miguel Cardona is secretly, “through cloak and dagger,” attempting to pardon student loan debt after being stopped twice by the courts already. Bailey claims that this is the “third and weakest attempt.”
“See What Sticks”
In a statement, Bailey said, “They may be throwing spaghetti at the wall to see what sticks, but my office is meeting them every step of the way.”
A new plan for student debt forgiveness has not yet been finalized but it is expected to be by this fall. As no debt can be forgiven before then, the lawsuit claims that the Biden administration is attempting to cut corners.
“Expressly Violates a Statute”
According to the lawsuit, “That is both extraordinarily inequitable and also expressly violates a statute prohibiting the Secretary from implementing rules like this one sooner than 60 days after publication.”
The lawsuit contends that Cardona is aware that student loans that have already been forgiven cannot be reversed by states and this is the reason why he is “trying to quietly rush this rule out too quickly for anybody to sue.”
“Ivy League Debt”
As per Bailey’s statement, “The Biden-Harris Administration is dedicated to saddling working Americans with Ivy League debt, even if they have to break the law to do it.”
In the past, the United States Supreme Court has ruled in favor of the two previous challenges by Bailey in the Biden administration’s attempts to cancel student loan debt.
As Biden nears the end of his presidency, those who were promised debt forgiveness during his campaign will be expecting to see the results of their vote.
