Biden Admin. Changes Loan Forgiveness as GOP States Sue

    Biden Admin. Changes Loan Forgiveness as GOP States Sue
    Last updated: 2 months ago
    Image credit: Reuters


    • On Thursday, the Biden admin. changed the qualifications for its student-loan forgiveness program in response to several lawsuits from Republican-led states. [1]
    • The changes specifically affect Federal Family Education Loan (FFEL) borrowers, whose loans were issued by private banks but backed by the federal government. The White House previously said it would allow FFEL borrowers to consolidate their loans into federal loans, but around 770K FFEL borrowers will now be disqualified from the forgiveness program. [2]
    • Citing the HEROES Act of 2003, the Biden admin. claims it can forgive the loans using the COVID pandemic as an emergency situation. But attorneys general from Iowa, Kansas, Arkansas, Nebraska, South Carolina, and Missouri have sued, saying the admin. overstepped its statutory authority. [3]
    • Arkansas Attorney General Leslie Rutledge has argued that Biden can't use COVID as an excuse because he declared the pandemic over, adding that federal forgiveness would also hinder the Arkansas Student Loan Authority's ability to offer new loans if it loses revenue. [4]
    • The Pacific Legal Foundation also filed suit last week on behalf of Frank Garrison of Indiana, who's currently under a different forgiveness plan for public servants that won't tax his subsidy. He argues that once Biden's plan erases $20K of his loans, Indiana would trigger an "immediate tax liability" that he would otherwise not face. [5]
    • With a Congressional Budget Office (CBO) report estimating Biden's program will cost at least $400B, some have claimed student-loan forgiveness will add to inflationary issues. The White House, though, says a projected $1.7T decrease in the federal deficit will counteract those issues. [1]
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    Democratic narrative

    Republicans are filing lawsuits as shameless political stunts. Individuals like Garrison can now opt out of the program, and therefore he has no legal ground to stand on. As for the attorneys general, they can only speculate that the program will negatively impact their states, and speculative injury has no standing in court.

    Republican narrative

    The Biden administration's arguments are full of statistical lies and are morally bankrupt. One study estimates the total cost of the program to be a staggering $1T over 10 years. Millions of non-college graduates - who make far less than their degree-holding counterparts - will be footing the bill through rising inflation and taxes.

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