Student loan forgiveness: 11 states sue to end latest Biden loan program

Attorneys general in 11 states filed suit Thursday to overturn President Joe Biden’s new student loan forgiveness plan, The Washington Post reported.

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The lawsuit argues that the plan that allows for forgiveness of student loan debt under the SAVE plan is just an end-run on last year’s 6-3 decision from the Supreme Court that struck down the president’s original student loan forgiveness plan.

The court ruled last June that Biden had overstepped his authority when he proposed a plan to forgive up to $20,000 in federally backed student loans.

Biden’s latest plan — Saving on a Valuable Education program, or SAVE — calculates loan payments based on income and family size rather than the balance on the loan.

Monthly payments are calculated by discretionary income, or the difference between a person’s gross income and 225% of the federally defined poverty level. For an individual that level would be around $33,885.

More than 150,000 enrollees who originally borrowed less than $12,000 and have been paying for 10 years have had their debt canceled through the program.

The federal lawsuit was filed by Kansas Attorney General Kris Kobach. Joining in the suit are the attorneys general of Nebraska, Iowa, Texas, Alabama, Alaska, Idaho, Louisiana, Montana, South Carolina and Utah, according to The Associated Press.

“In completely brazen fashion the president pressed ahead and implemented another version of the student loan forgiveness program,” Kobach told reporters at a news conference Thursday.

“President Biden is defying the ruling of the United States Supreme Court while also seizing power from Congress. Fortunately, in America, we live in a constitutional republic and the courts can strike down an illegal or unconstitutional executive act. That is what we are asking the court to do in this case, and we look forward to seeing the president’s attorneys in court.”

The Education Department declined comment on the lawsuit.

According to the suit, the attorneys general are seeking a temporary injunction to block the SAVE program, the AP reported.

The Biden administration has estimated the SAVE plan will cost $156 billion over the next decade, but the Congressional Budget Office says the figure is closer to $230 billion, the Post reported.

The SAVE program was created using authority granted under the Higher Education Act.

The lawsuit claims the HEA does not give the president the authority to dismiss the loans unless the borrowers are permanently disabled, defrauded by their college, working in public service or bankrupt.

The Department of Education has said that the HEA had been amended at least three times before the SAVE program to alter the way loans are repaid or forgiven.

More than 7.7 million borrowers are enrolled in the SAVE plan to date.

According to the administration, the typical borrower could save $1,000 a year on restructured payments.

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