President Joe Biden is moving ahead with a divisive student loan forgiveness plan in the face of a series of lawsuits from a number of conservative groups who believe he overstepped his authority in issuing more than $400 billion in estimated debt forgiveness ahead of the 2022 midterm elections.
However, it’s increasingly likely that the number of debtors who will actually be forgiven under the plan will be fewer than Biden’s initial proposal that inspired outrage from conservatives who accused him of “buying votes” with the pledge.
Shortly after Arkansas Attorney General Leslie Rutledge announced a lawsuit with several other attorneys general targeting Biden’s student loan forgiveness plan Thursday morning, the Biden administration quietly changed the guidance language for who qualifies under the forgiveness plan, carving out those whose debts were held by private commercial lenders rather than the federal government.
While that decision was likely made out of concern that private banks could sue the federal government for the financial harm that could be incurred by the decision, states like Arkansas say that any forgiveness of student loan debt—including debt held by the federal government—could harm their states’ revenue streams, and that Biden violated federal law when he used his executive power to skirt Congress‘ authority to implement the policy.
“President Biden knew that he did not have the proper authority to authorize this broad executive action, and that is why he attempted to work with Congress to find a legitimate and legal solution to the student loan crisis,” Rutledge told reporters in a Thursday press conference in Little Rock, Arkansas. “But even Congress knew that the result of this policy would not ultimately benefit the country.”
Biden, they allege in the suit, improperly exploited an obscure 2003 law called the Higher Education Relief Opportunities for Students Act that had previously been used by the Department of Education to relieve active-duty personnel from various administrative requirements that could hinder their operations in the field, including various financial aid programs. The administration’s justification for the lawsuit, they argued, disregards the act’s original objectives and distorts it in a way to advance Biden’s political agenda on student loans.
“It is the epitome of unlawful and arbitrary agency action, and it should be set aside,” the lawsuit argues.
The alleged abuse of the law also played a central role in a Tuesday lawsuit filed by the conservative Pacific Legal Foundation, which argued it was flagrantly illegal for the executive branch to create a massive spending program “by press release,” and with no statutory authority or even the basic notice and comment procedure for new regulations.
But it could also cause some states financial harm, the attorneys general argued, ultimately allowing them to take action against the federal government.
Dylan Jacobs, the Arkansas deputy solicitor general, told reporters that the state’s student loan authority would likely see a significant drop in revenue as a result of the Biden administration program, potentially preventing them from being able to finance new student loans.
Newsweek has contacted the White House and the U.S. Department of Education for comment.
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