States sued Biden administration over student loan forgiveness

WASHINGTON – Six Republican-led states are suing the Biden administration in an attempt to stop its plan to forgive the student loan debt of tens of millions of Americans, accusing it of overstepping its executive authority.

this at least the second subpoena this week to a broad proposal laid out by President Joe Biden in late August, when he said his administration cancels up to $20,000 in education debt for a large number of borrowers. The announcement, which came after months of internal debate and pressure from liberal activists, became an immediate political salvo ahead of November’s midterm elections while bolstering conservatives’ case for legitimacy.

In a lawsuit filed Thursday in federal court in Missouri, the Republican states say Biden’s repeal plan is “not remotely adequate to address the effects of the pandemic on federal student loan borrowers,” as required by a 2003 federal law that the administration uses as legal justification. They note that Biden, in an interview with CBS’s “60 Minutes” this month, declared that the Covid-19 pandemic is over, but is still using the current health emergency as an excuse large-scale debt relief.

“It is clearly unfair to burden hard-working Americans with the loan debt of those who choose to go to college,” Arkansas Attorney General Leslie Rutledge, who leads the group, said in an interview.

She added: “According to the law, the Ministry of Education is obliged to collect arrears on loans. And President Biden doesn’t have the authority to overturn it.”

The states of Iowa, Kansas, Missouri, Nebraska and South Carolina joined Arkansas in filing the lawsuit. Iowa has a Democratic attorney general, but Gov. Kim Reynolds, a Republican, signed on for the state. The states say the Missouri credit service is facing “a number of ongoing financial losses” because of Biden’s decision to cancel the loans. Other states that have joined the lawsuit argue that Biden’s amnesty plan will end up draining state coffers.

Biden’s pardon program cancels $10,000 in student loan debt for those earning less than $125,000 or for families with incomes less than $250,000. Pell Grant Recipientswho typically demonstrate greater financial need, will receive an additional $10,000 in debt.

The administration also said it would extend the current pause in federal student loan repayments — suspended before the pandemic began more than two years ago — once more through the end of the year.

The administration almost immediately faced threats of legal challenges to its plans, with conservative lawyers, Republican lawmakers and business groups arguing that Biden was overstepping his authority by taking such sweeping action without congressional approval.

Democratic lawmakers in tough re-election contests have also distanced themselves from the student loan plan, which Republican officials have called an unfair government handout to the relatively wealthy at the expense of those without college degrees.

In their lawsuit, Republican attorneys general also argue that the pardon program violates the Administrative Procedure Act, which defines how federal agencies must rule to ensure that executive branch policies are well reasoned and explained.

“The president does not have the authority to put himself in the shoes of Congress,” Rutledge said in an interview. “That action has to be taken by Congress and it can’t undo it.”

To justify the legality of the plan, the Biden administration relying on post-ver. 11, 2001, Act intended to help the military, which the Justice Department says allows Biden to reduce or erase student loan debt during a national emergency. But Republicans argue that the administration is misinterpreting the law, in part because the pandemic no longer qualifies as a national emergency.

Another lawsuit against Biden’s student loan program was filed this week in federal court in Indiana by the Pacific Legal Foundation, a libertarian legal advocacy group that employs a lawyer who says the forgiveness plan will hurt him. The lawyer, Frank Garrison, says that wiping out his current debt would make the state of Indiana, one of at least a half-dozen states where Forgiven loan amounts will be subject to state taxes.

The White House dismissed the lawsuit as without merit because any borrower who doesn’t want debt collection can opt out. The Department of Education is still on track to submit applications for the forgiveness plan in early October, and on Thursday it sent an email to borrowers explaining how to prepare to apply. The email noted that applicants do not need to submit any supporting documents.

Republicans have also seized on the price tag of Biden’s plan and its impact on the nation’s budget deficit. The Congressional Budget Office said this week that the program will worth about $400 billion over the next three decades. The White House countered that the CBO’s estimate of how much the plan would cost in the first year alone, $21 billion, was lower than the administration originally estimated.

Associated Press writer Colin Binkley contributed to this report.