Republican-led US States Sue Over New Biden Student Debt Relief Plan

By Nate Raymond

Seven Republican-led states have initiated a lawsuit against President Joe Biden’s administration regarding its recent student debt forgiveness initiative. The suit comes in response to reports that the U.S. Department of Education may begin cancelling loans in the coming days.

This legal action follows the U.S. Supreme Court’s decision to reject the Biden administration’s attempt to reinstate a previous debt relief program aimed at reducing monthly payments for numerous borrowers and accelerating loan forgiveness for some.

The lawsuit, filed in federal court in Brunswick, Georgia, targets a rule proposed by the Education Department in April that would potentially waive federal student loan debts for approximately 27.6 million borrowers.

Attorney generals from states such as Georgia and Missouri claim they possess documents indicating that the Education Department has directed federal loan servicers to initiate the cancellation of hundreds of billions of dollars in loans as soon as this week, even before the rule is finalized. According to the lawsuit, this could result in the immediate cancellation of at least $73 billion in loans, with additional debt relief likely to follow. The states contend that the Education Department lacks the authority to execute such widespread debt forgiveness.

Missouri Attorney General Andrew Bailey expressed confidence in their legal efforts, stating, "We successfully halted their first two illegal student loan cancellation schemes; I have no doubt we will secure yet another win to block the third one."

While a spokesperson for the Education Department refrained from commenting directly on the lawsuit, they emphasized their commitment to advocating for borrowers facing difficulties in repaying federal student loans. Since taking office, the Biden administration has already authorized $169 billion in debt relief for nearly 4.8 million individuals.

This lawsuit adds to the mounting legal battles against the Democratic president’s endeavors to deliver relief to millions of Americans who have relied on federal student loans for their education.

Republican-led states successfully persuaded the U.S. Supreme Court in June 2023 to halt a $430 billion plan aimed at forgiving up to $20,000 in debt for up to 43 million borrowers. Following that setback, the administration shifted its focus to a new initiative known as the Saving on a Valuable Education (SAVE) plan. This program is designed to reduce monthly payments for borrowers and expedite loan forgiveness.

However, the SAVE plan has faced its own challenges, with a federal appeals court blocking it while legal disputes are ongoing. The Supreme Court recently declined to lift that injunction.

The current plan is based on a different provision of the Higher Education Act, which several prominent Democrats, including Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren, argue grants the administration the authority to cancel student debt.