Conservative groups sue to block Biden plan canceling $39 billion in student loans

by Lucas Garcia
fokus keyword: lawsuit

Two conservative organizations have initiated legal proceedings in a federal court to halt the Biden administration’s scheme to write off $39 billion in student debt for over 800,000 individuals who borrowed money.

The lawsuit, which was filed in Michigan on Friday, contends that the administration transgressed its legal limits by announcing this forgiveness in July, a short time after the Supreme Court nullified a more expansive cancellation strategy endorsed by President Biden.

The legal complaint urges a judge to declare the cancellation unlawful and prevent the Education Department from implementing it while the lawsuit is under review. The New Civil Liberties Alliance filed the suit on behalf of the Mackinac Center for Public Policy and the Cato Institute.

According to the Education Department, the lawsuit is nothing but a desperate measure by right-wing groups to continue burdening hundreds of thousands of borrowers with debt. In a statement, the department vowed not to yield or compromise in its defense of working-class families.

A part of a series of legal objections that Republicans have raised against the Biden administration’s strategies to minimize or erase student loans for millions of Americans, this case emerges as a major concern. Following the Supreme Court’s ruling, Biden has declared his intent to pursue an alternative cancellation strategy, alongside a more liberal repayment plan that critics label as a covert cancellation attempt.

On July 14, the Biden administration unveiled that it would soon erase debts for 804,000 borrowers enrolled in repayment plans linked to their income. Although these plans have traditionally allowed forgiveness after 20 or 25 years of payments, previous administrative errors had caused incorrect payment calculations, delaying borrowers’ progress toward cancellation.

The recent action, described as a “one-time adjustment,” considered specific past non-payment periods as if payments were made, thus moving 804,000 borrowers beyond the required 20 or 25 years for cancellation and bringing millions closer to that point.

The one-time fix also considered past forbearance periods as progress toward Public Service Loan Forgiveness, which offers cancellation after 10 years of payments for those working in government or nonprofit roles.

The lawsuit declares Biden’s action illegal, stating that it lacked congressional authorization and failed to follow the federal rulemaking process that requires public input.

Furthermore, the conservative organizations argue that Biden’s approach undermines Public Service Loan Forgiveness. Both the Mackinac Center and the Cato Institute, who employ borrowers aiming for student loan forgiveness through this program, assert that Biden’s action unlawfully hastens progress toward relief, thus diminishing the advantages for nonprofit employers.

The lawsuit accuses, “This unlawful reduction in the PSLF service requirement injures public service employers that rely on PSLF to recruit and retain college-educated employees.”

Additionally, the Cato Institute has previously sued the administration over another cancellation plan, and the Mackinac Center is independently challenging Biden’s temporary halt on student loan payments, which is set to conclude this fall, with payments recommencing on October 1.

The educational reporting team at The Big Big News gets backing from the Carnegie Corporation of New York, but the AP retains full responsibility for the content.

Frequently Asked Questions (FAQs) about fokus keyword: lawsuit

Who filed the lawsuit against the Biden administration’s plan to cancel student loans?

The lawsuit was filed by two conservative groups, the New Civil Liberties Alliance on behalf of the Mackinac Center for Public Policy and the Cato Institute.

What is the main argument of the lawsuit?

The main argument of the lawsuit is that the Biden administration overstepped its legal authority by announcing the forgiveness of $39 billion in student loans. The groups argue that the plan was not authorized by Congress and did not go through the required federal rulemaking process.

How many borrowers would be affected by the cancellation plan?

The cancellation plan would affect more than 800,000 borrowers, forgiving $39 billion in student loans.

What does the Education Department say about the lawsuit?

The Education Department has called the lawsuit a “desperate attempt” by right-wing special interests to keep hundreds of thousands of borrowers in debt and vowed to defend working-class families without backing down.

What was the one-time adjustment announced by the Biden administration?

The one-time adjustment was a new action that would count certain periods of past nonpayment as if borrowers had been making payments during that time, moving 804,000 borrowers to the cancellation threshold. Past periods in forbearance were also counted as progress toward Public Service Loan Forgiveness.

How does the lawsuit say the plan affects Public Service Loan Forgiveness (PSLF)?

The conservative groups claim that Biden’s plan illegally accelerates progress toward relief under the PSLF program, which injures public service employers that rely on PSLF to recruit and retain employees, diminishing the benefit for nonprofit employers.

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Mike_D August 6, 2023 - 11:36 pm

this student loan thing is a mess. People need help. Bt is this the right way? Not sure really.

Kathy Williams August 7, 2023 - 1:15 am

Honestly I’m so confused. So much legal jargon and all, I hope the loans get cancelled for those in need but I guess theres a right way to do things.

Jenny M. August 7, 2023 - 1:31 pm

Student loans are a nightmare. My kids are in debt, and this plan could help. i hope they figure this out soon. It’s a life-saver for many.

John Smith August 7, 2023 - 1:33 pm

I can’t beleive what’s happening here, this is crazy! I mean Biden’s trying to help people here, why block it?

Tim87 August 7, 2023 - 1:34 pm

Conservative groups always get in the way, or so it seems. Biden’s plans are always controversial, But maybe there’s something to be said about following the rules?

Sara O'Connor August 7, 2023 - 3:57 pm

what’s the point of a law if they don’t follow the process. Rules are there for a reason. Right or not, it has to be legal first


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