GOP States Challenge Biden’s $73 Billion Student Loan Forgiveness Plan

A coalition of Republican-led states has initiated a legal challenge against the Biden administration's new student loan forgiveness initiative, which is poised to cost billions. The lawsuit claims that the Education Department is unlawfully attempting to cancel hundreds of billions of dollars in student loans. The states argue that this mass cancellation would financially harm them and their affiliated loan servicers, particularly MOHELA, which services federal student loans. They assert that the program violates federal law in both its creation and implementation. The new initiative, referred to as 'Plan B,' aims to provide relief to borrowers based on specific criteria, including those who took out loans before certain dates and those who owe more than their original loan amounts due to interest. It also targets borrowers from schools that lost federal financial aid eligibility and those who qualify for existing forgiveness programs but have not applied. The program is expected to implement relief automatically, with an opt-out date set for August 30. This legal action follows previous attempts by Missouri and other GOP-led states to block Biden's student debt relief efforts, including a prior plan that was overturned by the Supreme Court. The ongoing legal disputes highlight the contentious nature of student loan forgiveness in the U.S. and the significant political divide surrounding the issue. As the legal challenge unfolds, the future of the new student loan forgiveness program remains uncertain, with potential implications for millions of borrowers who may benefit from the relief. The case is likely to escalate to the Supreme Court, continuing the trend of judicial scrutiny over the Biden administration's education policies.