GOP States Sue to Halt Biden Admin’s Plan to Cancel Student Debt

On September 4, seven states led by the GOP initiated a lawsuit against the Biden administration´s recent efforts to cancel student debt, arguing that the new plan could start eliminating loans as early as this week if not stopped by judicial intervention.

President Joe Biden has previously attempted to cancel hundreds of billions of dollars in student loans for millions of borrowers. Both of these attempts faced significant opposition, resulting in lawsuits filed by Republican leaders and injunctions imposed by the courts.

The lawsuit, filed on Tuesday, saw Missouri Attorney General Andrew Bailey spearheading the challenge. The states contend that Education Secretary Miguel Cardona is attempting to discreetly implement a mass cancellation of student loans after prior attempts were thwarted by court rulings.

The legal document states, “This is the third time the Secretary has unlawfully tried to mass cancel hundreds of billions of dollars in loans. Courts stopped him the first two times when he tried to do so openly. Now he is trying to do so through cloak and dagger.”

This lawsuit focuses on a new rule introduced by the White House in April, which aims to offer debt relief to tens of millions of Americans. Although still in the process of being finalized, the plan proposes to eliminate accrued interest for 23 million borrowers, fully cancel the student debt of 4 million borrowers, and provide at least $5,000 in relief to another 10 million.

According to the lawsuit, this plan is Cardona’s “weakest” proposal so far, yet it is described as “the most aggressive,” given its potential to begin canceling loans imminently.

The lawsuit argues, “That is both extraordinarily inequitable and also expressly violates a statute prohibiting the Secretary from implementing rules like this one sooner than 60 days after publication,” further accusing Cardona of trying to hastily advance this rule to preempt any legal challenges.

Bailey remarked that the plan represents the Biden administration’s effort to burden working Americans with the financial obligations of “Ivy League debt.” He expressed confidence in their legal strategy, stating, “We successfully halted their first two illegal student loan cancellation schemes; I have no doubt we will secure yet another win to block the third one. They may be throwing spaghetti at the wall to see what sticks, but my office is meeting them every step of the way.”

Joining Missouri in this lawsuit are Georgia, Alabama, Arkansas, Florida, North Dakota, and Ohio.

The Biden administration’s initial attempt to forgive student debt, known as the HEROES Plan, was introduced by Cardona in August 2022. This initiative proposed to eliminate up to $20,000 of federal student loan debt for qualifying borrowers, but it was ultimately blocked by the Supreme Court last year.

In July 2023, the administration announced the SAVE Plan, which aimed to reduce monthly payments and halt the growth of interest on loans. Notably, this plan was also obstructed by the Supreme Court just last week.