Thursday, March 28, 2024

President Biden’s Student Loan Forgiveness Plan Faces Uphill Battle in Court

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President Biden's landmark student loan forgiveness plan is getting its first test in court.

On Tuesday, a public interest attorney filed a lawsuit against the Department of Education to block President Biden's “illegal” move to cancel more than $500 billion in student loan debt.

Frank Garrison, an attorney at Pacific Legal Foundation, brought the suit against the Department of Education in the U.S. District Court for the Southern District of Indiana.

Garrison, who qualifies for the loan handout himself after paying off student loans for the past decade says the administration's move would stick Garrison with a new state tax bill which he would not have under his existing Public Service Loan Forgiveness (PSLF) program.

Indiana, along with other states, plans to tax the upcoming student loan cancelation as income. Garrison's legal team argues that he will be left with a greater financial burden under the new tax plan than his current PSLF program but he has no ability to opt-out of Biden's plan.

“He did not ask for cancelation, doesn't want it, and has no way to opt out of it,” the Pacific Legal Foundation said in a release Tuesday.

Last month, President Biden announced he would forgive $10,000 of federal student loan debt for certain borrowers making less than $125,000 per year, and up to $20,000 for Pell Grant recipients. (RELATED: Biden Announces Student Loan Forgiveness)

According to Fox News, Garrison and his attorneys cited the 's choice of turning to the HEROES Act, which allows the to modify loans to assist and their families as needed during times of war or other national emergencies, as a “flimsy pretext for a major policy change that has declined to enact.”

“Congress did not authorize the executive branch to unilaterally cancel student debt,” said Caleb Kruckenberg, an attorney at Pacific Legal Foundation. “It's flagrantly illegal for the executive branch to create a $500 billion program by press release, and without statutory authority or even the basic notice and comment procedure for new regulations.”

“That is just unconstitutional,” attorney Michael Poon Poon told Digital. “The law says you have to repay student loans. Biden is ignoring those laws, and he can't do that.” 

White House Press Secretary Karine Jean-Pierre responded to the lawsuit during a Tuesday press briefing and defended President Biden's move.

“The bottom line is this: no one who does not want debt relief will have to get that debt relief, so folks have an option to opt out,” she said. “But again, this is going to help tens of millions of Americans–Americans who are now going to be able to put money down to maybe buy a house or start a family, and that matters.”

The nonpartisan Congressional Budget Office (CBO) recently announced that Biden's move to cancel student loan debt will cost taxpayers more than $400 billion.

“CBO estimates that the cost of student loans will increase by about an additional $400 billion in present value as a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022, for borrowers with income below specified limits and an additional $10,000 for such borrowers who also received at least one Pell grant,” the CBO said in a letter released Monday. 

The lawsuit marks the first legal challenge to the policy and a major test of its constitutionality.

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Nancy Jackson
Nancy Jackson
Nancy grew up in the South where her passion for politics first began. After getting her BA in journalism from Ole Miss she became an arts and culture writer for Athens Magazine where she enjoyed reporting on the eclectic music and art scene in Athens, GA. However, her desire to report on issues and policies impacting everyday Americans won out and she packed her bags for Washington, DC. Now, she splits her time between the Nation’s Capital and Philadelphia where she covers the fast-paced environment of politics, business, and news. In her off time, you can find Nancy exploring museums or enjoying brunch with friends.

5 COMMENTS

  1. What could possibly be wrong about the president unilaterally deciding to take tax payer money to pay off loans that were taken in good faith by lending institutions from people who, I think, intended to pay them off themselves. What possible law would give the president this kind of power?

  2. Buffoon Joe Bidet does not care if his debt forgiveness is unlawful or unconstitutional!! His (mis)administration simply ignores the law and the U.S. Constitution because the are arrogant, elitist, self-absorbed, criminal POS’s that are more interested in gaining even more political power and enriching themselves monetarily. Bidet, his family, those placed in power by him feel they are above the laws and that their rights are the only rights that matter.

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