Six Republican-led states filed a lawsuit on Thursday aiming to stop tens of millions of student loan borrowers from receiving relief from President Joe Biden’s debt forgiveness plan in one of Republicans’ first legal challenges to the plan.
Arkansas, Iowa and South Carolina are suing the Education Department, saying that the plan is too broad and “inherently unfair.” The lawsuit, filed in a Missouri federal court, argues that the plan is not “tailored to address the effects of the pandemic” on borrowers. They argue that loan servicers would also be hurt by the plan, especially MOHELA, Missouri’s student loan servicer and one of the largest student loan servicers in the U.S.
If the suit is successful the suit could stop the grant of the plan Debts up to $20,000Pell Grant recipients receive assistance and $10,000 for those earning less than $125,000 per year.
This lawsuit was not unexpected. Republicans had warned of their plans. challenge the student debt relief plan, saying that it’s too expensive or that it overreaches the president’s power.
Proponents of student debt forgiveness say, however, that Republicans’ true motivesare to keep the middle and lower class poor or in debt. Openly admit that they did. that they oppose the debt forgiveness plan because it would reduce the military’s ability to recruit poor people who couldn’t otherwise afford higher education.
Advocates say that the GOP’s complaints over the cost of the plan are frivolous. Right-wingers have been citing conservative-ledThe Congressional Budget Office (CBO), released an estimate earlier this week that the plan was in compliance with the budget. would cost $400 billion. They forget to mention that the cost would be spread over the next thirty years. Just over half of what the U.S. spends on the Pentagon yearly — a cost that Republicans almost never complain about.
The calculation of how much revenue student loans could generate for the government might also be exaggerated. July report from the Government Accountability Office found that, despite previous estimates, federal student loan borrowing actually costs the government billions of dollars, in part because many borrowers simply can’t afford to pay their loans back.
“Corrupt politicians are doing the student loan industry’s dirty work. A judge will quickly dispose of this sham lawsuit, but we won’t forget,” the Student Borrower Protection Center saidThursday. “Banks and student lenders — especially MOHELA — want to profit by trapping families in debt. We will hold them accountable.”
“Republicans want to keep you in debt for the rest of your life and take away student debt cancellation,” wrote the Debt Collectiveon Thursday, in retaliation to the lawsuit “It is an interesting strategy to adopt before the midterms.”
Indeed, Polls have shown thatPopularity of the student debt plan. According to polls, a majorityA majority of Americans support the plan. Nearly half of voters say they’re more likely to vote this fall because of the plan that’s likely helped to boost Biden’s approval rating.
This is at most the second. lawsuit filedThe plan was criticized. The Pacific Legal Foundation, a libertarian legal firm, filed a suit earlier this week claiming that the plan would cause him harm. He would be required to pay state taxes on the cancellation. In a legal filingBiden administration officials responded to the lawsuit simply said that the lawsuit’s argument is moot because the forgiveness plan gives borrowers an option to opt out of the relief.
In an opinion piece published Wednesday, The Washington Post’s Paul Waldman wrote that the attempt to stop student debt forgiveness is “upside-down class war” — a war waged by upper class and elite Republicans against middle- and low-income, Black and Latinx and young people to take away a rare bit of relief given to them by a political system that is designed to sap Wealth is not available to everyday people to investThe 1 percent.
Even though the legal challenges to the plan may be in their early stages, the Biden administration already appears willing to comply with them.
Reports noted on ThursdayThe terms of the forgiveness plan have been changed by the Department of Education to exclude approximately 4 million borrowers. have privately heldDespite the fact that such borrowers were included in earlier iterations, student loans include Federal Family Education Loans (FFEL) and Perkins loans. Legal experts say that theThis change appears to have been made by the Education Department in preparation for legal challenges to this plan.
“FFEL lenders have shown their true colors,” the Student Borrower Protection Center wrote on Thursday. “Instead of working in the interest of student loan borrowers — their customers — these lenders are holding hostage relief from millions in order to keep making a buck off of suffering.”
