Six States Sue Biden, Education Secretary Over Student Loan Forgiveness

Six states sued Biden and his education secretary, arguing that their plan to cancel an estimated $300 billion dollars in student loan debt is illegal.

The lawsuit was filed Thursday in U.S. District Court for the Eastern District of Missouri by the attorneys general of Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. It accuses the Biden administration of violating federal law including the constitutional principle of separation of powers and the Administrative Procedure Act when he circumvented congressional authority to implement this policy.

Joe Biden announced his plan last month to cancel $10,000 in student loans for those who meet certain income requirements and $20,000 for students who received Pell Grants who met the same requirements.

“It is the epitome of unlawful and arbitrary agency action, and it should be set aside,” officials from the six states said in the lawsuit.

“No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed,” the lawsuit said. “Just months ago, the Supreme Court warned federal agencies against ‘asserting highly consequential power beyond what Congress could reasonably be understood to have granted’ by statute. Yet the Administration’s Mass Debt Cancellation does precisely that.”

That attorneys general state that student loan borrowers were not adversely affected by the pandemic because student loan payments were suspended.

“Since most borrowers during the pandemic missed no payments (because none were due), and most borrowers during the pandemic accrued no interest (because the interest rate has been 0%), and credit reporting bureaus during the pandemic have been reporting student loans as being on time and the underlying loans as being current (acting to increase an individual’s credit score), there is no pandemic-caused harm in relation to most borrowers’ student loans,” the attorneys general said. “In fact, 80% of all student loan borrowers saw their credit scores increase during the pandemic, with the largest increases among borrowers with delinquent loans at the beginning of the pandemic.”

The attorneys general are asking the court to cancel the student loan forgiveness plan on the grounds that it violates the separation of powers under the U.S. Constitution and the Administration Procedure Act.