Lawsuit Against Biden Administration Effectively Pauses Student Loan Forgiveness

The lawsuit claims that Biden exceeded his authority by attempting to cancel student loans

Photo Credit: apnews.com
Joe Biden announces that he will be forgiving student loan debt up to $20,000 at the White House on August 24, 2022.

By Julia Salazar

The student loan forgiveness application process has officially been paused as six GOP states—Iowa, Kansas, Missouri, Nebraska, South Carolina, and Arkansas—sue the Biden Administration, based on the claim that President Joe Biden does not have the authority to forgive student loans.

“President Biden’s unlawful political play puts the self-wrought college-loan debt on the backs of hard-working Americans who are struggling to pay their utility bills and home loans in the midst of Biden’s inflation,” said Arkansas Attorney General Leslie Rutledge. “President Biden does not have the power to arbitrarily erase the college debt of adults who chose to take out those loans.”

On August 24, 2022, President Biden announced a student loan forgiveness plan, which promised to forgive up to $10,000 for borrowers and $20,000 for those who received Pell Grants. 

Rutledge filed the lawsuit on September 29, with the other five Republican-led states quickly falling behind her in an attempt to block Biden’s forgiveness plan.

The lawsuit detailed that Biden claimed that student loan debt relief was justified by federal law; this legislation would permit such action during a health emergency in the United States, like the COVID-19 Pandemic. The lawsuit then cited that Biden, in a 60 Minutes interview, declared that the pandemic was over. 

Due to anticipated lawsuits against student loan forgiveness, the Biden Administration has revisited eligibility requirements for students looking to lessen the number of loans they will have to pay off after graduation. 

Initially, it was announced that those who have private student loans will also be eligible for one-time student loan forgiveness. Now, those who have private student loans would have had to consolidate their loans by September 29, effectively shutting out about 700,000 borrowers from receiving any form of loan forgiveness.

The original eligibility requirements, based on income, continue to apply but will be based on parental income if a student is still a dependent. Those who haven’t received financial aid and do not rely on their parent’s income for school-related expenses may not receive any form of loan forgiveness.

The lawsuit has effectively paused the student loan forgiveness application process as Biden has now promised to not move forward until October 17, due to legal proceedings. Elizabeth Warren, senator of Massachusetts, condemns those trying to stop student loan forgiveness and tells where their true priorities lie.

“Republican officials are so angry about @JoeBiden helping working people that they’re suing to stop student debt cancellation,” says Warren in a tweet on October 3rd. “It won’t work, but it shows their priorities: putting the profits of corporate loan services over relief for working-class and middle-class Americans.”

The estimated cost of forgiveness is about $400 billion over the course of 30 years, according to the Congressional Budget Office. Democrats are surprisingly divided on Biden’s decision of whether student loan forgiveness is worth the cost, considering the state of the economy due to the COVID-19 pandemic.

Some argue it will only give Americans more money to spend, and due to the current issue of inflation, that is not necessarily ideal. Others say that not only will debt forgiveness help lower-income Americans, but it will also shrink the racial wealth gap.

Midterm elections are coming up on Tuesday, November 8th. Twitter user @cinnibunns stressed the importance of voting; with student loan forgiveness on the line, it’s crucial for young people and students to show up at the polls.

“We collectively need to vote out all political candidates that are working to stop student debt relief,” said Twitter user @cinnibunns. “Times are changing and the government needs to change with the times.”

Categories: Politics

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