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17 states sue Biden over latest student loan bailout plan

Attorneys general for 17 Republican-led states have sued the Biden administration over its latest student loan debt forgiveness plan, arguing it does not have the authority to wipe out student loan debt for an estimated 30 million Americans.

Under Biden’s new effort, called the Saving on a Valuable Education plan, “borrowers who originally took out $12,000 or less in loans and have been in repayment for 10 years are eligible to get their remaining debt canceled,” an April 8 news release states.

The SAVE plan would also forgive debt for “borrowers in public service for 10 years who have made 120 months of qualifying payments.”

“Yet again, the President is unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress,” states one of the lawsuits, filed by Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.

“President Biden does not have the authority to erase student debt without express congressional approval,” Missouri Attorney General Andrew Bailey’s spokesperson said in an emailed statement to The College Fix.

“AG Bailey swore an oath to uphold our Constitution, so he filed suit to do exactly that in this instance. Every American, including Missouri taxpayers, benefit from that.”

The second lawsuit, filed by Kansas, Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina and Texas, argues that the last time the Biden administration wiped out student loan debt administratively, the Supreme Court ruled it was unlawful.

“Nothing since then has changed,” the lawsuit argues.

“Biden openly boasted about his defiance of the Supreme Court with this move, stating in Jacksonian fashion: ‘the Supreme Court blocked it. They blocked it. But that didn’t stop me,’” the lawsuit states. “This lawsuit is now necessary to prevent Defendants from continuing to flout the law, which includes ignoring Supreme Court decisions.”

A U.S. Department of Education spokesperson defended the latest loan forgiveness plan in a statement to The College Fix.

“The Department does not comment on pending litigation. However, Congress gave the U.S. Department of Education the authority to define the terms of income-driven repayment plans in 1993, and the SAVE plan is the fourth time the Department has used that authority,” the statement read.

“The Biden-Harris Administration won’t stop fighting to provide support and relief to borrowers across the country – no matter how many times Republican elected officials try to stop us,” it added.

The new plan’s cost is unknown.

“The White House hasn’t put forward an estimate for how much the new plan would cost the federal government. Biden’s earlier program would have forgiven roughly $430 billion in student loan debt,” The Wall Street Journal reported April 8.

Student loan bailouts were a key 2020 election promise from Biden, but the Supreme Court in June 2023 struck down Biden’s initial attempt in Biden v. Nebraska, ruling the HEROES Act does not grant him the authority to cancel $430 billion-plus of student loan principal.

But soon after the decision was handed down, Biden announced the new student debt loan forgiveness plan.

According to the administration, the plan is aimed at providing relief to Americans borrowers with large amounts of accrued interest, those who have made timely loan payments for a number of years, and former students at higher education programs deemed to be of “low-financial-value,” the White House stated.

Unless the courts grant an injunction to prevent the SAVE plan from being implemented, loan relief will take effect on July 1, according to the lawsuits.

“Despite the Court having already settled this issue, the Biden administration continues to brazenly violate the law. This is election-year politics and an egregious example of federal overreach, and we’re fighting back yet again,” Georgia Attorney General Chris Carr stated in an email interview with The College Fix.

Florida Attorney General Ashley Moody’s news release on the SAVE plan lawsuit states that they “will fight in court to make sure that hard-working Americans, who are struggling to buy groceries thanks to Biden, are not on the hook for other people’s debt.”

In an April 8 editorial, The Wall Street Journal denounced the proposal, arguing it “will encourage colleges to raise costs, especially in graduate programs for which there are no federal loan limits. Who cares if students can’t repay? They will be forgiven one way or another.”

MORE: Biden’s new student loan bailout plan ignores Supreme Court ruling, tries same thing twice

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About the Author
College Fix contributor Sophia Vitter is a student at the University of Calgary majoring in international relations. She grew up just outside of Washington, D.C., where she developed an interest in global affairs and politics.