The U.S. Department of Education in Washington, D.C.
Caroline Brehman | CQ-Roll Call, Inc. | Getty Images
Seven Republican-led states have sued the U.S. Department of Education to block the Biden administration from carrying out its sweeping new student loan forgiveness plan.
In the lawsuit, the states — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio — say the department’s new effort to forgive student debt, like its previous attempts, which were blocked by the courts, is illegal.
The states accuse the Biden administration of trying to “unlawfully … mass cancel hundreds of billions of dollars of loans” without approval from Congress and allege that the Education Department already instructed its loan servicers to begin canceling the eligible loans as early as Sept. 3, which would violate timing restrictions around the rulemaking process.
The Education Department is expected to publish the final rule on its debt relief sometime in October. The states say they “just uncovered documents” showing the department could act sooner, skirting federal regulations.
A spokesperson for the Education Department declined to comment on the pending litigation.
“But we will continue to fight for borrowers across the country who are struggling to repay their federal student loans,” they said.
There is debate over what the exact costs of the new debt relief plan will be, but one estimate puts its price tag at around $147 billion, rather than the hundreds of billons of dollars alleged by the states.
The lawsuit is the latest attempt by Republicans to prevent President Joe Biden from reducing or eliminating people’s student loan balances. Experts have predicted that Biden could try to deliver the relief to tens of millions of Americans just weeks before the election.
The Biden administration began working on its do-over student loan forgiveness plan after the Supreme Court blocked its first policy in June 2023. The revised relief plan targets four groups of borrowers, including those who owe more than they originally borrowed and graduates of low-value programs. Some 25 million people could benefit.
Its new affordable repayment plan, known as SAVE, is also on hold amid a slew of legal challenges. SAVE comes with two key provisions that lawsuits have targeted: It has lower monthly payments than any other federal student loan repayment plan, and it leads to quicker debt forgiveness for those with small balances.
