Conservative groups have filed a lawsuit against President Joe Biden over his proposal to forgive $39 billion in student loan debt. The White House had to come up with new plans for loan forgiveness after the Supreme Court rejected their initial proposal. The Cato Institute and New Civil Liberties Alliance are now suing the Biden administration, demanding that a federal court block the new income-driven repayment plans. This legal battle is just the latest in a series of challenges against the President’s attempts to cancel outstanding student loans.
Repayments for student loans are set to resume soon after a three-year postponement due to the pandemic. Many people are concerned about the financial strain of paying off their loans, especially considering inflation and the rising cost of living. The lawsuit, filed in Michigan, argues that Biden’s Education Department is exceeding its authority with these new plans. The Department of Education has dismissed the suit as a ploy by right-wing special interests to keep borrowers in debt.
The conservative groups claim that Biden’s actions are illegal because Congress did not authorize them and the plans did not go through the necessary federal rulemaking process. They argue that the Department of Education cannot count non-payments as payments and criticize the lack of transparency in the announcement of the policy. On July 14, the Biden administration unveiled a forgiveness plan specifically for borrowers enrolled in income-driven repayment plans. These plans adjust monthly payments based on borrowers’ income and typically offer forgiveness after 20 or 25 years of payments.
The Department of Education argues that previous administrative failures have hindered borrowers’ progress toward loan repayment and forgiveness. The proposed “one-time adjustment” would treat past periods of non-payment as if borrowers had made payments during that time, expediting the timeline for forgiveness. This plan aims to ensure that 804,000 borrowers receive total cancellation, while also bringing millions of others closer to the 20 or 25-year mark. The lawsuit contends that Biden’s plan is an attempt to bypass Congress in achieving widespread student loan forgiveness.
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