Conservative Legal Group Sues To Block Biden’s Student Loan Forgiveness
Pacific Legal Foundation says the plan violates federal law
WASHINGTON, DC – AUGUST 24: U.S. President Joe Biden speaks on student loan debt in the Roosevelt Room of the White House August 24, 2022 in Washington, DC. President Biden announced steps to forgive $10,000 in student loan debt for borrowers who make less than $125,000 per year and cap payments at 5 percent of monthly income. (Photo by Alex Wong/Getty Images) Josh Christenson • September 27, 2022 10:25 am
A conservative legal group is suing the Biden administration to block what it says is the president’s plan to cancel hundreds of billions of dollars in student loan debt.
Pacific Legal Foundation on Tuesday asked a federal court in Indiana to stop the Department of Education from forgiving $500 billion of student debt beginning in October. The group says President Joe Biden is abusing a 2003 law meant to forgive student loans for veterans or service members in times of war or “national emergency.” The Biden administration claims the coronavirus pandemic constitutes a national emergency.
The lawsuit is the first challenge to Biden’s plan to cancel up to $20,000 of loans per student, which is poised to cost up to $1 trillion over the next decade. Former Obama economic adviser Jason Furman has said the cancellation will be like “gasoline on the inflationary fire that is already burning.”
The Department of Education did not respond to a request for comment.
The Biden administration relied on a 2003 law, the Higher Education Relief Opportunities for Students Act, to justify the “emergency” loan cancellation. The law requires that loan forgiveness not place borrowers in a worse financial situation.
According to the Pacific Legal Foundation, Biden’s plan does just that. Borrowers who are part of federal student aid programs in six states will have their loan forgiveness taxed as income, threatening their financial stability.
Frank Garrison, the plaintiff in the case, is a public interest attorney at Pacific Legal Foundation and part of one such federal student aid program. He “will be stuck with a tax
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