Like many Republican lawmakers and conservatives, the GOP group said this policy was an overreach of that authority.Įmergencies are temporary, it said, adding that any response to them must also be temporary, referring to the continued student-loan-payment pauses from earlier in the pandemic. The Biden administration has long defended its one-time student-loan forgiveness under the HEROES Act of 2003, which gives the education secretary the ability to waive or modify student-loan balances in connection with a national emergency, like COVID-19. The Republicans representing Arkansas, South Carolina, Iowa, Kansas, Nebraska, and Missouri all said the states could suffer revenue loss from student-loan forgiveness, even as Biden's defense said any loss was "too speculative and attenuated." While each state can operate by its own tax code, changing their laws to make them consistent with federal law would ease the burden for taxpayers and revenue officers, Biden's team said, adding: "Compelling them to undo that will frustrate those purposes." Misinterpretation of the HEROES Act The Republicans bringing the suit said they were still being harmed by financial losses from consolidation because the process could be ongoing for borrowers who made the change before the September guidance, and they called for a pause on the debt relief and any related consolidations. But at the end of September, the department revised its guidance to say that FFEL borrowers could not consolidate their debt to qualify for relief, likely in response to the looming lawsuits. Here are the main points the Republican group will likely address in court, according to the filing: Financial harms suffered by debt consolidationĪfter announcing the relief, the Education Department said borrowers within the Family Federal Education Loan Program, which facilitated privately held loans, could consolidate their debt into direct federal loans to qualify for loan forgiveness. ![]() "Defendants' Rationale Memo, which the Secretary approved early the same morning it was completed, does not address key statutory elements of the HEROES Act, does not consider a single alternative to erasing billions in debt, and does not even attempt to justify central eligibility requirements contributing to the Cancellation's breathtaking scope." ![]() "Were there any doubt of the Cancellation's unlawfulness before, there isn't now," the filing said. In a court filing Tuesday, the group argued otherwise. It also dismissed concerns that relief would hurt MOHELA's operations, saying that is not legally justifiable. Should a judge rule in the group's favor, the long-awaited loan forgiveness would not move forward.Īt the end of last week, the Biden administration filed its first legal defense of the plan and pushed back on every argument the GOP-led states made about why the plan should be blocked, including justifying the education secretary's authority to cancel student debt under the HEROES Act of 2003. It's one of at least five major GOP lawsuits that have been filed in an effort to block the policy. ![]() Wednesday could be a turning point for President Joe Biden's plan for student-loan forgiveness.Ī federal judge will hear oral arguments from six Republican-led states that sued Biden over his move to implement $20,000 in debt relief per borrower, arguing that the relief would hurt their states' tax revenues and the financial operations of the loan company MOHELA in Missouri, where the lawsuit was filed.
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