A lawsuit was filed on Tuesday to challenge the U.S. President Joe Biden’s latest student debt relief plan. Seven Republican-led states came together to file this suit. They said the U.S. Department of Education was taking steps to start cancelling loans as soon as this week.
This lawsuit came in a week after the Supreme Court rejected Biden’s administration’s different bid for student debt relief. That plan was designed to lower monthly payments for millions of borrowers and speed up loan forgiveness for some.
In a federal court lawsuit in Georgia, state attorneys general took aim at a rule the Education Department proposed in April. This rule would provide for a waiver of federal student loan debts for an estimated 27.6 million borrowers.
No Debt Relief
Attorneys general from states including Georgia and Missouri say they recently obtained documents. These documents show the Education Department has instructed federal loan servicers to begin cancelling billions of dollars of loans.
That could lead to the overnight cancellation of at least $73 billion in loans, the lawsuit said. Billions in further debt relief could follow. The states argue the Education Department has no authority to carry out such debt forgiveness.
“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,” Missouri Attorney General Andrew Bailey said.
An Education Department spokesperson declined to comment on the case. They stressed it “will continue to fight for borrowers across the country who are struggling to repay their federal student loans.” The department under Biden has already approved $169 billion in debt relief for nearly 4.8 million people.
The lawsuit is the latest legal challenge to Biden’s efforts to fulfill a campaign pledge. He is trying to bring debt relief to millions of Americans who turned to federal student loans to fund their costly higher education.
Republican-led states successfully convinced the Supreme Court in June 2023 to block a $430 billion program championed by Biden. This program would have cancelled up to $20,000 in debt per borrower for up to 43 million Americans.
The administration then pursued a different program dubbed the Saving on a Valuable Education, or SAVE, plan. This plan lowered monthly payments for millions of borrowers and sped up loan forgiveness for some.
But Republican-led states convinced a federal appeals court to block that plan while litigation over it continues to play out. The Supreme Court on Aug. 28 declined to lift that injunction.
(with inputs from Reuters)
