A federal court has sided with Missouri Attorney General Andrew Bailey in his effort to block President Biden’s student loan handout plan, known as the “SAVE” plan. This decision marks another significant legal setback for the Biden administration, which has faced multiple lawsuits from states challenging the legality of its student loan forgiveness initiatives.
The lawsuit, filed by Missouri and six other states, argues that Biden’s SAVE plan is illegal and would impose a $475 billion burden on American taxpayers. Bailey contends that the President lacks the authority to unilaterally cancel student loan debt without explicit congressional approval. “With the stroke of his pen, Joe Biden is attempting to saddle working Missourians with a half trillion dollars in debt,” Bailey told Fox News Digital. “The United States Constitution makes clear that the President lacks the authority to unilaterally ‘cancel’ student loan debt for millions of Americans without express permission from Congress.”
Joining Missouri in the lawsuit are the attorneys general of Arkansas, Florida, Georgia, Ohio, Oklahoma, and North Dakota. Both Missouri and Arkansas were also part of the lawsuit that led to the Supreme Court’s decision last year, which ruled Biden’s previous student loan forgiveness plan unconstitutional. Arkansas Attorney General Tim Griffin emphasized that the Supreme Court had already made it clear that the President cannot unilaterally cancel student debt and force taxpayers to bear the cost.
The lawsuit claims that Biden’s SAVE plan is part of a troubling pattern of the President using vague language from old statutes to implement drastic and costly policy changes without public consent. The White House has not yet responded to the lawsuit, but the Biden administration has previously defended the SAVE program, stating that Congress granted the Department of Education the authority to define income-driven repayment plans in 1993. An Education Department spokesperson reiterated that the Biden-Harris Administration would continue to fight to provide support and relief to borrowers across the country.
The lawsuit comes just a day after Biden announced another plan to cancel student loan debt, focusing on cutting loans that have exceeded their principal amount due to interest. This new plan would cut up to $20,000 in accrued interest for borrowers, particularly those earning less than $120,000 annually or couples earning less than $240,000. While Bailey has not yet taken legal action against this new plan, he indicated that his office is closely monitoring it.
The Biden administration’s SAVE plan, launched last year, aims to provide a “student loan safety net” by offering more generous terms than previous repayment plans. Congress created income-driven repayment plans in the 1990s to help borrowers struggling to make payments, capping payments based on income and promising to cancel any remaining debt after 20 or 25 years. The SAVE plan reduces monthly payments further and forgives loans in as little as 10 years. Nearly 8 million Americans have enrolled in the plan, including 4.5 million low-income borrowers who have had their monthly payments reduced to $0.
The lawsuit argues that the SAVE plan would deprive the Missouri Higher Education Loan Authority (MOHELA) of up to 15 years in servicing fees, causing financial harm to the state. It also claims that the plan undermines the Public Service Loan Forgiveness program, which allows borrowers to get student loans canceled after 10 years of work in public service jobs. The lawsuit states that the SAVE plan makes it harder for states to hire and retain employees, as it offers more generous terms than the Public Service Loan Forgiveness program.
The states involved in the lawsuit argue that the SAVE plan is essentially a grant program that Congress never authorized. They claim that more than half of the borrowers in the plan are paying nothing, which undermines the original intent of student loan programs.
In response to Biden’s latest proposal to reduce or cancel student loans for 30 million Americans, Bailey took to social media, calling it an illegal attempt to bypass Congress. “The rule of law means something in this country,” he wrote. “See you in court.”
The ongoing legal battles highlight the contentious nature of Biden’s student loan forgiveness efforts. While the administration continues to push for relief for borrowers, Republican-led states are determined to challenge what they see as executive overreach. The outcome of these lawsuits will have significant implications for the future of student loan forgiveness in the United States.
Source: Fox News, Associated Press
