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Six GOP-led states sue to block Biden's student debt relief plan

Six Republican-led states on Thursday filed a lawsuit against President Joe Biden's plan to offer student debt relief to millions of borrowers. Photo by Michael Reynolds/UPI | <a href="/News_Photos/lp/935a63bcfd6ad4b378b816f449c89810/" target="_blank">License Photo</a>
Six Republican-led states on Thursday filed a lawsuit against President Joe Biden's plan to offer student debt relief to millions of borrowers. Photo by Michael Reynolds/UPI | License Photo

Sept. 30 (UPI) -- Six Republican-led states have filed a lawsuit against President Joe Biden's student loan forgiveness plan as a federal judge dismissed a case lodged by a libertarian public interest law firm seeking to also cancel the program.

The series of litigation comes as Republicans have bristled at Biden's plan announced late last month to cancel up to $20,000 of student debt issued to Pell Grant recipients and up to $10,000 of debt issued to federal borrowers who earn less than $125,000 individually or $250,000 as a household.

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While the White House has defended the move as aiding families and those harmed by the financial effects of the pandemic, Republicans object to the notion of using taxpayer money to pay off the student loan debt of those they describe as "an elite few."

The 36-page lawsuit filed Thursday by the attorneys general and solicitors general of Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina accuses Biden of violating federal law by skirting congressional authority to implement his policy.

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"In addition to being economically unwise and downright unfair, the Biden administration's mass debt cancellation is yet another example in a long line of unlawful regulatory actions," the lawsuit filed in a Missouri court said. "No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed."

The GOP elected officials also balked at the Biden administration's use of a federal law passed in the wake of the 9/11 terrorist attacks to modify student financial assistance programs for service members.

While the White House says it may use mechanisms provided it by the Higher Education Relief Opportunities for Students Act to lessen the impacts of the COVID-19 pandemic, the lawsuit argues that it's "inconceivable" to think Congress had this use in mind when the passed the HEROS Act.

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"The mass debt cancellation is not remotely tailored to address the effects of the pandemic on federal student loan borrowers, as required by the HEROES Act," the lawsuit states, saying the plan "disregards the Act's objectives and express requirements and distorts the Act beyond recognition in the service of the administration's political agenda."

The lawsuit also points to House Speaker Nancy Pelosi, D-Calif., stating in July of 2021 that the president "does not" have the power to forgive student debt and "that has to be an act of Congress."

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The Republican officials also argue the Biden's plan will each state's financial and proprietary interests.

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

The lawsuit was filed as a judge in Indianapolis denied a case lodged days earlier by the Pacific Legal Foundation asking the court to block Biden's plan.

The foundation filed the complaint Tuesday on behalf of one of its attorneys, Frank Garrison, a Pell Grant recipient. The lawsuit argues that in his state of Indiana, Garrison will have to pay taxes on the cancelation of his debt that will make him worse off than if he simply paid.

The program, they said, does not offer Garrison the option to opt out.

Seemingly in response to the lawsuit, the White House updated the Department of Education website to state: "If you would like to opt out of debt relief for any reason -- including because you are concerned about a state tax liability -- you will be given an opportunity to opt out."

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Due to the update, U.S. District Judge Richard Young rejected the Pacific Legal Foundation case, stating that in light of the update "plaintiff cannot be irreparably harmed as is required for preliminary relief."

According to Young's ruling, the foundation has moved to amend their complaint, which they have until Oct. 10 to file.

Meanwhile, the Department of Education on Thursday night also unveiled its cost estimate for the program, stating the one-time relief plan will cost an average of $30 billion a year over the next decade for a total of cost of $379 billion in today's dollars.

The announcement came as several estimates for the program have been published, including one Monday from the Congressional Budget Office that put the plan's price tag at $400 billion over the next 30 years and another published late last month by the Committee for a Responsible Federal Budget that said it would reach as high as $650 billion.

The White House has repeatedly defended the program by saying it will reduce the financial burden placed on the shoulders of tens of millions of people, including nearly 20 million who could see their entire remaining student debt erased.

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