Seven states led by Republicans filed a new lawsuit on Tuesday in an attempt to stop the Biden administration from implementing new student loan forgiveness programs, which it was anticipated would begin this fall.
The case is yet another judicial challenge to President Joe Biden’s policy regarding student loans, and it may complicate his most recent attempt to provide debt relief before the November election.
Biden’s SAVE (Saving on a Valuable Education) student loan repayment scheme is currently on hold until the 8th US Circuit Court of Appeals handles legal matters. Additionally, last year the Supreme Court overturned the president’s expansive one-time student loan forgiveness scheme.
A series of recommendations that the Department of Education began formulating shortly after the Supreme Court rejected the Biden administration’s program are at issue in the most recent litigation. The goal of the new proposals is to provide student loan forgiveness that is more specific and resistant to court challenges.
One of the clauses would eliminate accrued interest for borrowers of federal student loans whose balances exceed their initial loans. For borrowers making less than $120,000 annually, the entire amount of interest would be waived. Others may be eligible for debt relief of up to $20,000.
The Department of Education estimates that 23 million persons will gain from the interest cancellation under the proposed rule. The agency stated in an August email to borrowers that it will begin providing this debt relief in the next autumn.
The anticipated cost of the interest cancellation is $73 billion.
The collection of ideas for student loan relief has not yet been finalised despite a protracted rulemaking procedure.
According to the lawsuit, the plaintiffs have obtained documents indicating that the Department of Education plans to offer a portion of the student debt relief as early as this week. This is allegedly in violation of a statute that forbids the education secretary from enforcing a rule more quickly than sixty days following its publication.
“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,” Missouri Attorney General Andrew Bailey, who is leading the lawsuit, said in a statement.
Regarding ongoing legal proceedings, the Department of Education chose not to comment.
More student loan debt has been cancelled under Biden’s presidency than under any other president, despite the Supreme Court overturning his expansive loan forgiveness scheme. This has primarily been accomplished by maintaining existing programs. Under his administration, debtors who belong to specific categories—public sector employees, including teachers—are now more likely to be eligible for student loan debt forgiveness. These groups also include those who were cheated by for-profit universities.
In total, $169 billion in federal student loans have been cancelled for almost 4.8 million people so far under Biden.
