Six states filed a joint lawsuit against the Biden administration on September 29 to block the federal government’s plan to forgive up to $20,000 of federal student loans per person. The states allege the administration overstepped its executive authority and was “not remotely tailored to address the effects of the pandemic on federal student loan borrowers.” The states also argued that the Department of Education was legally required to collect student loans and could not stop collecting without congressional approval.
The lawsuit, led by Arkansas Attorney General Leslie Rutledge, alleged that four of the states (Iowa, Kansas, Nebraska, and South Carolina) were harmed by the policy because they could not collect taxes on the loan relief. It also alleged that Missouri would lose revenue from loans it owned through the Federal Family Education Loan Program.
Of the six states, five have Republican trifectas and one (Kansas) has a divided government. All of the states except Iowa have Republican attorneys general.
If the forgiveness plan survives court challenges, it will cancel $10,000 in student loan debt per person for individual tax filers making less than $125,000 or married filers with less than $250,000 in income. Pell Grant recipients are eligible to have an additional $10,000 forgiven under the plan.
Additional reading:
Learn More
