Lawsuit Filed by 11 GOP States Aims to Halt Debt Relief for Thousands of Student-Loan Borrowers

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    • Eleven GOP state attorneys general filed a lawsuit to block the SAVE income-driven repayment plan.
    • They argued that the shortened timeline for debt relief through the plan is unconstitutional.
    • An Education Department official said Congress allows the authority to set terms for income-driven repayment.

Lawsuits challenging President Joe Biden’s efforts to provide relief for student debt have resurfaced.

Eleven state attorneys general, with Kris Kobach of Kansas leading the charge, have filed a lawsuit to prevent the implementation of Biden’s SAVE income-driven repayment plan. The plan, which was introduced during the summer, aims to provide borrowers with more affordable monthly payments and faster relief.

A lawsuit has been filed against President Biden and Education Secretary Miguel Cardona in Kansas’ district court. The lawsuit argues that it is necessary to take legal action to prevent the defendants from disregarding the law and ignoring Supreme Court decisions. Specifically, the lawsuit refers to the Supreme Court’s recent decision to strike down Biden’s initial attempt to provide widespread student loan forgiveness through the HEROES Act of 2003.

During a press conference on Thursday, Kobach criticized the Biden administration, accusing them of taking from the less privileged and giving to the wealthy. He expressed his concern about the burden placed on individuals who did not attend college or those who worked their way through college, being forced to shoulder the responsibility of paying off the substantial student loan debts accumulated by others. Kobach emphasized that this coalition of Republican attorneys general would step forward and take action to halt Biden’s proposed measures.

In a surprising move, the Education Department has taken swift action by implementing an aspect of the SAVE plan earlier than expected. Approximately 153,000 borrowers, who initially borrowed $12,000 or less and have made at least 10 years of qualifying payments, are now eligible for $1.2 billion in debt relief. However, a lawsuit has been filed against this relief, claiming that it goes against the Supreme Court’s rulings. The plaintiffs are seeking a declaration of unconstitutionality and demanding that borrowers continue making payments.

According to a representative from the Education Department, the department cannot provide comment on ongoing legal matters. However, they did mention that the US Department of Education was granted the power to establish the parameters of income-driven repayment plans by Congress in 1993. The newly introduced SAVE plan marks the fourth instance in which the department has exercised this authority.

“The Biden-Harris Administration has been dedicated to addressing the challenges of a flawed student loan system since the beginning. As part of this effort, they have introduced an incredibly affordable student loan repayment plan that aims to reduce monthly payments, safeguard borrowers from exorbitant interest rates, and expedite the path to debt forgiveness,” stated an official. “Regardless of the opposition from Republican elected officials, the Biden-Harris Administration remains unwavering in their commitment to assist and alleviate the burden of borrowers nationwide.”

The lawsuit draws various comparisons to the debt relief plan that was invalidated by the Supreme Court, but it is important to note that the legal foundations of the two plans are different. In his initial proposal for widespread student loan forgiveness, President Biden aimed to eliminate a maximum of $20,000 in debt for borrowers earning less than $125,000 per year. This plan was based on the HEROES Act, a legislation that grants the education secretary the authority to waive or modify borrowers’ loan balances during national emergencies, such as a pandemic.

The SAVE plan, however, underwent a process called negotiated rulemaking, as mandated by the Higher Education Act. This process involves engaging with stakeholders and soliciting public input before finalizing the plan. Currently, the Education Department is in the midst of the negotiated rulemaking process for its second endeavor to expand debt relief.

The Education Department has not yet responded to the lawsuit, but it is important to note that borrowers who have already received relief through SAVE are not currently affected. As a result, individuals can still enroll in the program without any disruption.

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