Republican states file lawsuit to block Biden’s student loan forgiveness plan

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Six Republican-led states filed a lawsuit Thursday to overturn President Biden’s plan to forgive up to $20,000 in student debt for millions of borrowers, as conservatives advance legal challenges against the one of the administration’s flagship economic policy initiatives.

The new lawsuit, filed in federal court in Missouri, comes two days after a conservative Indiana attorney filed a separate lawsuit against the administration seeking to reverse the policy. The lawsuit filed by the GOP-led states asks the court to immediately block the program to prevent the Biden administration from writing off loan balances as early as next week.

Lawsuit seeks to stop Biden’s student loan forgiveness plan

The White House policy would forgive up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 a year, or less than $250,000 for married couples, or up to $20,000 for those who have received Federal Pell Grants. The Biden administration has been adamant that it has the legal power to cancel student debt, citing a 2003 law giving the executive branch broad power to overhaul student loan programs.

GOP lawmakers and conservative advocacy groups have pushed back on that claim, arguing that Biden’s move represents an illegal overreach of the executive branch because the 2003 law was created to give the president authority after a disaster like the terrorist attacks of September 11, 2001. Instead, Republicans such as Sen. stands” before the court or the grounds for taking legal action.

The Indiana lawyer pursuing the policy said he has standing because canceling the debt could drive up his state tax bill, since Indiana plans to impose the relief federal debt as a form of income. White House press secretary Karine Jean-Pierre dismissed that claim on Tuesday, telling reporters that “anyone who doesn’t want debt relief can walk away.”

The states’ lawsuit takes a different approach, arguing that canceling the debt will hurt them in many ways. The lawsuit points out that Missouri’s student loan manager, which is part of its state government, could see its revenue decline as borrowers are likely to consolidate their loans under the federal Family Education Loans program. On Thursday, however, the administration said it would exclude FFEL from the loan cancellation program, a movement first reported by Politico. The change could help stave off lawsuits against the policy, although it will mean around 2 million of the 44 million otherwise eligible borrowers will not be eligible for relief.

Missouri Attorney General Eric Schmitt (R), who is leading the litigation, also said in a statement that the policy would worsen inflation for Americans who do not benefit from student debt forgiveness. Arkansas, Iowa, Kansas, Nebraska and South Carolina joined Missouri in filing the lawsuit. Schmitt is also the Republican nominee for the U.S. Senate seat from Missouri in this fall’s election.

“No law authorizes President Biden to unilaterally release millions of individuals from their obligation to repay loans they have voluntarily taken out,” the lawsuit states.

This is breaking news and will be updated.

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