Republican-led suit to end Biden student debt relief plan draws criticism

ATLANTA (CN) — Seven Republican-led states' legal efforts to block President Joe Biden’s new policy to reduce or eliminate the balances of millions of student loan borrowers do more harm than good to the 43.6 million Americans that have federal student loan debts, according to advocates and experts.

"The Republicans are hugely misguided in trying to protect and defend this failing loan program," Alan Collinge, founder of Student Loan Justice, which fights to cancel all federally owned student loans by executive action, said.

Collinge said he is astonished that citizens in many states collectively owe more in student loan debt than their state's budget.

"The people of Georgia, for example, owe the Department of Education $71 billion in federal student loan debt, most of which is interest that costs the taxpayers nothing to cancel. More than half of those people are Republican or independent, so it makes no sense logically, and is frankly moronic, politically," Collinge said.

Georgia joined the lawsuit led by Missouri Attorney General Andrew Bailey, as haveMissouri, Alabama, Arkansas, Florida, North Carolina and Ohio.

It is the latest legal attempt by Bailey and other conservative officials to dismantle Biden’s student debt relief policies. It was filed in a Georgia federal court just days after the Supreme Court refused to lift a nationwide injunction of the administration’s new student loan repayment plan.

“Conservatives have successfully framed higher education as a personal benefit as opposed to a public good. We must reframe the discussion and return to our roots to once again embrace the idea that ‘the cornerstone of democracy rests on the foundation of an educated electorate,’” Bryan Dawson, a resident from Arlington, Virginia, said on the issue.

This past January, before the injunction blocked the plan's benefits, over 286,000 borrowers in Georgia alone enrolled in the program. Of these borrowers, 16,340 were already identified for debt cancellation. Georgia ranks third in the nation for student loan debt per borrower; Florida ranks fifth.

"In Georgia, this policy could benefit student loan borrowers by reducing financial burdens, improving homeownership rates and credit scores, and lowering delinquency rates on other debt," Ashley Young, a senior education analyst at the Georgia Budget & Policy Institute, said.

Young also noted racial disparities in the weight of those holding student debt, with Black women carrying the most student debt of any racial or ethnic group.

"Support for student loan debt relief is crucial for Georgians, especially for women of color," she said.

The states claim they obtained documents in which the U.S. Department of Education is instructing its loan servicers to start clearing the debt of borrowers this week before the new rule plan introduced in April is finalized. They argue the department has no legal authority to take such action, which could they said could result in $73 billion in student loan debt being forgiven overnight.

Under the new proposed plan, partial or full debt relief is provided to borrowers who either owe far more than they originally borrowed due to interest, who have been paying for at least 20 or 25 years, who attended career training programs that led to high debt loads or low earnings, and those who are eligible for existing forgiveness programs but did not apply.

The new plan cites a different law from the one used in the administration's 2022 plan. It relies on the authority of the Higher Education Act, which led to the creation of income-driven repayment plans that allowed borrowers of most federal student loans to pay only what they could afford each month based on a percentage of their income.

After the Supreme Court shot down Biden’s plan to forgive up to $20,000 in federal student loans per borrower in 2023, the administration has since tried new efforts to achieve large-scale debt cancellation through a more targeted approach than the previous plan.

But on Aug, 9, a federal appeals court extended an order blocking the White House from moving ahead with its Saving on a Valuable Education (SAVE) relief plan — an income-driven repayment plan that calculates payments based on a borrower’s income and family size, not their loan balance, and forgives remaining balances after a certain number of years.

The Biden administration has already paused collection on some student loans as their proposed plans continue to face Republican-led legal challenges.

Follow @Megwiththenews

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit