New Civil Liberties Alliance sues Biden administration over new student loan plan
Eden Villalovas
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Conservative groups are suing the Biden administration over its new student loan debt plan, which would erase payments for hundreds of thousands of Americans.
The New Civil Liberties Alliance filed a lawsuit Friday, representing the Mackinac Center and the Cato Institute, to challenge President Joe Biden’s Saving on a Valuable Education (SAVE) plan. The groups are asking the court to block the program, claiming it violates federal law by not allowing for public comment or participation in the rulemaking process.
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The lawsuit alleges the plan breaches the Constitution multiple times, including the Appropriations Clause, which permits Congress to decide what debt owed to the Treasury can be canceled.
“When the Department of Education administratively undercuts Congress’s enacted program — either with permanent debt forgiveness or by extending deferments — PSLF employers have standing to sue to stop it,” Mark Chenoweth, president and general counsel of the NCLA, said in a statement arguing the plan undermines the Public Service Loan Forgiveness Program Congress enacted in 2007.
Attorneys claim that the incentive to use PSLF will no longer exist if the new plan allows for forgiveness in less than 10 years. PSLF can be used by public sector and nonprofit workers to have their outstanding debt forgiven after 10 years of service.
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Weeks after the Supreme Court struck down Biden’s student-loan forgiveness program that would have canceled up to $20,000 of debt for millions of Americans, the administration put out an updated measure. Stemming from the U.S. Department of Education’s efforts to improve repayment paths, the SAVE plan could cancel $39 billion in federal student loans for over 804,000 borrowers who have been in a repayment plan for more than 20 years.
“Newsflash for Secretary Cardona and Administrator Cordray: Non-payments are not payments,” Chenoweth said. “No amount of nonsense changes the essential fact Congress required debtors to make payments before receiving debt relief.”