Red State Coalition Sues to Block Biden’s Latest Student Loan Forgiveness Scheme

‘President Biden’s new student loan forgiveness plan is slightly smaller than the old one, at least for now. But it’s just as illegal,’ he said.

President Joe Biden announces student loan relief with Education Secretary Miguel Cardona (R) at the White House on Aug. 24, 2022. Olivier Douliery/AFP via Getty Images

A coalition of 11 Republican attorneys general has sued the Biden administration in a bid to block President Joe Biden’s latest student loan forgiveness scheme, arguing it’s illegal because Congress didn’t approve it.

The lawsuit was filed on March 28 in the U.S. District Court for the District of Kansas, and it seeks a declaration that the “SAVE Plan“ student loan cancellation program is unlawful along with a judgment stating that the defendants lacked the authority to implement it.

“A coalition of States sues Defendant Biden, as well as co-defendants the Department of Education and Secretary of Education Miguel Cordona, to stop a second attempt to avoid Congress and pass an illegal student debt forgiveness,” the complaint reads.

In the summer of 2023, the Supreme Court blocked President Biden’s plan to cancel $430 billion in student loan debt for some 43 million Americans, protecting taxpayers from having to foot the bill and delivering a blow to one of the president’s campaign promises.

Undeterred by the Supreme Court ruling, President Biden quickly rolled out a new student loan forgiveness scheme to take its place, this one an income-driven repayment plan that forgives a portion of student debt based on the borrower’s income and family size.

The regulations implementing the SAVE Plan are scheduled to fully go into effect on July 1, 2024, but the Biden administration said in January that it would accelerate some of the benefits, soon after forgiving $1.2 billion in student loans for nearly 153,000 borrowers enrolled in the plan.

“Just ten days after the Supreme Court’s rebuke, Defendants released a Rule purporting to abolish at least $156 billion in student debt, with at new ‘SAVE Plan’ as its centerpiece,” the complaint reads.

Kansas Attorney General Kris Kobach, whose office is leading the lawsuit, said at a press conference on Thursday that the new forgiveness scheme is nominally smaller but that this could change once it goes into effect.

“President Biden’s new student loan forgiveness plan is slightly smaller than the old one, at least for now. But it’s just as illegal,” he said, per the Kansas City Star.

‘This Action Was Illegal’

The lawsuit alleges that the $156 billion that taxpayers would have to fund is in reality just a “floor” and that the true number could be far higher. That’s because the Department of Education allegedly failed to update the cost estimate of the SAVE Plan to include part of the $430 billion plan that the Supreme Court nixed but that the Biden administration had assumed would get canceled.

The complaint also alleges that the Biden administration is exceeding its authority because it’s implementing the scheme without congressional approval. It argues that if the Biden administration can cancel debt by defining the terms of income-driven repayment plans by executive action, it opens the door to a much bigger debt forgiveness program.

“The authority that Defendants claim now lacks any substantive limits and amounts to claiming that they can abolish all student debt at any time by rulemaking alone,” the complaint reads.

“Indeed, as the Defendants scrape ever deeper into the barrel for legal pretexts to abolish student debts, the illegality of those artifices becomes more obvious,” it adds.

The Kansas-led lawsuit is backed by the attorneys general af Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas, and Utah.

Missouri attorney general Andrew Bailey praised the initiative and said his state would be leading another multi-state coalition against the Biden administration’s student debt forgiveness in the coming days.

“I’m extremely pleased to see Kansas is leading a multi-state coalition in challenging President Biden’s latest attempt to unlawfully transfer hundreds of thousands of dollars in Ivy League debt onto working Missouri families,” Mr. Bailey said in a statement.

Missouri led the coalition that successfully sued the Biden administration over its first debt-cancellation plan.

“The Supreme Court sided with us on this matter the first time,” Mr. Bailey said in a post on X. “I look forward to bringing home yet another win for the Constitution and the rule of law.”

“Between our two coalitions of states, we will get this matter in front of a judge even more quickly to deliver a win for the American people,” he added.

A spokesperson for the Department of Education told The Epoch Times that the agency wouldn’t comment on pending litigation, but insisted that Congress gave it the authority to define the terms of income-driven repayment plans decades ago, adding that the SAVE Plan is the fourth time it has used that authority.

Biden Boasts Of Flouting SCOTUS Ruling

During a speech in Las Vegas in February, President Biden boasted that he has continued canceling student debt due to workarounds in defiance of the Supreme Court ruling that blocked his debt relief plan.

“I promised we'd help eliminate accumulated student debt that millions of Americans carried during the economic pandemic and beyond,” President Biden said in the speech, recalling one of his key campaign promises.

“The Supreme Court of the United States blocked me, but they didn’t stop me,” he continued, saying he “found another way” to continue canceling student debt, while falsely claiming that the various forgiveness schemes were “not costing people” anything.

Following the Supreme Court ruling, President Biden denounced the decision in a June 30, 2023, speech at the White House. He said that the ruling “closed one path” but that his administration would “pursue another.”

This later led to the August 2023 announcement of the SAVE Plan.

*This article has been updated with comments from the Department of Education.