Jefferson City, Missouri – Missouri’s Attorney General, Andrew Bailey, has led six other GOP states in filing a lawsuit to block President Joe Biden’s new student-loan repayment plan. The lawsuit argues that the SAVE income-driven repayment plan, established in July 2023, is unconstitutional and defies a Supreme Court decision that previously blocked Biden’s attempt at broad debt relief. This is the second lawsuit filed so far to block the student-loan repayment plan.
The lawsuit specifically takes issue with the early implementation of a provision of the SAVE plan by the Education Department in February. The provision provided $1.2 billion in debt relief for 153,000 borrowers who originally borrowed $12,000 or less and made as few as 10 years of qualifying payments. The lawsuit argues that there is no justification for the early implementation of this provision.
The lawsuit accuses President Biden of relying on outdated statutes to make significant policy changes without the consent of the American people. It points out that this is part of a troubling pattern and claims that the President’s actions are a violation of the Constitution.
Another key argument in the lawsuit is the potential harm to the revenue of student-loan company MOHELA, which is based in Missouri. The lawsuit asserts that any loan forgiveness would result in financial harm to MOHELA, as it would lose revenue from servicing those loans. The states also claim that the SAVE plan diminishes the value of the Public Service Loan Forgiveness program and undermines states’ efforts to recruit workers for the public sector.
This lawsuit follows a separate lawsuit filed by a group of 11 GOP state attorneys general, also targeting the SAVE plan. The Education Department has not commented on the pending litigation but has noted that it has the authority to define the terms of income-driven repayment plans.
In the coming months, Biden is set to release details of his broader student-loan forgiveness plan, which is expected to benefit over 30 million borrowers. However, it is likely that more lawsuits will be filed against these plans. The battle over student-loan repayment continues, with states challenging the constitutionality and financial implications of Biden’s proposed changes.
Without the support of news organizations, this information has been sourced from public announcements, legal sources, and official documents.