Six GOP States Sue to Stop Biden Student Debt Relief Program

Six GOP States Sue to Stop Biden Student Debt Relief Program

iStockphot/The Fiscal Times

Six states led by Republicans filed a lawsuit Thursday that seeks to halt President Joe Biden’s plan to forgive up to $20,000 in student loan debt for millions of Americans.

Filed in federal court in Missouri, the suit seeks an immediate injunction to stop what it calls the “Mass Debt Cancellation” from moving forward. The suit claims that the program, which the Congressional Budget Office estimates could cost more than $400 billion over 30 years, is unfair and unlawful, exceeding the authority granted to the executive: “No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed,” the suit says.

Leslie Rutledge, the Republican attorney general of Arkansas – joined by the top legal officers from Iowa, Kansas, Missouri, Nebraska and South Carolina – also argues that the administration’s legal justification for the unilateral debt forgiveness is unsound. The White House is relying on the HEROES Act of 2003, a 9/11-era law that gives the Secretary of Education broad latitude to eliminate student debt during a national emergency. The lawsuit says that the administration is stretching the meaning of that law past the breaking point – and that, in any case, the national emergency is over, according to President Biden himself on a recent episode of “60 Minutes.”

“It is inconceivable that when Congress passed the HEROES Act, it thought it was authorizing the President to unilaterally decree something like the Mass Debt Cancellation, which will result in around half a trillion dollars in losses to the federal treasury,” Nebraska Attorney General Doug Peterson said in a statement.

White House responds: Biden administration spokesperson Abdullah Hasan charged that the suit seeks to prevent the government from helping people who are struggling in the wake of the pandemic. “Republican officials from these six states are standing with special interests and fighting to stop relief for borrowers buried under mountains of debt,” he said. “The president and his administration are lawfully giving working- and middle-class families breathing room as they recover from the pandemic and prepare to resume loan payments in January.”

The White House is clearly concerned about legal challenges, however. Although the administration quickly addressed a separate suit filed earlier this week by making it clear that no one would be forced to have their student debt forgiven, it took additional steps to shore up its legal position Thursday. Borrowers whose loans are owned by private companies have now been eliminated from the forgiveness program, a move designed to reduce the pool of people and organizations that could claim to be harmed by it.

“Private lenders and other entities that participate in the federally guaranteed student loan program are widely seen, both inside and outside the administration, as presenting the greatest legal threat to the program,” says Politico’s Michael Stratford.  

The bottom line: Opponents of Biden’s student loan forgiveness program may be just getting started, and it would be no surprise to see more lawsuits seeking to shut it down in the coming weeks.