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Monday 7 august 2023

Conservative groups sue to block Biden plan canceling $39 billion

in student loans

Continued from Front reduce or eliminate student announced July 14 that it
debt for millions of Ameri- would soon forgive loans
“We are not going to back cans. Biden has said he will for 804,000 borrowers en-
down or give an inch when pursue a different cancella- rolled in income-driven re-
it comes to defending tion plan after the Supreme payment plans. The plans
working families,” the de- Court decision, and his ad- have long offered cancel-
partment said in a state- ministration is separately lation after borrowers make
ment. unrolling a more generous 20 or 25 years of payments,
It’s part of a wave of legal repayment plan that op- but “past administrative
challenges Republicans ponents call a “backdoor failures” resulted in inaccu-
have leveled at the Biden attempt” at cancellation. rate payments counts that
administration’s efforts to The Biden administration set borrowers back on their

President Joe Biden speaks in the Roosevelt Room of the White
House, June 30, 2023, in Washington, as his administration
is moving forward on a new student debt relief plan after the
Supreme Court struck down his original initiative. (AP Photo/
Evan Vucci, File)
progress toward forgive- cellation after 10 years of
ness, the department said. payments while working in
The new action was an- a government or nonprofit
nounced as a “one-time job.
adjustment” that would Biden’s action was illegal,
count certain periods of the lawsuit says, because
past nonpayment as if bor- it wasn’t authorized by
rowers had been making Congress and didn’t go
payments during that time. through a federal rulemak-
It moved 804,000 borrow- ing process that invites
ers across the 20- or 25-year public feedback.
mark needed for cancel- “No authority allows the
lation, and it moved mil- Department to count non-
lions of others closer to that payments as payments,”
threshold. the lawsuit says. It adds
It’s meant to address a that the action came in “a
practice known as forbear- press release that neither
ance steering, in which identified the policy’s legal
student loan servicers authority nor considered its
hired by the government exorbitant price tag.”
wrongly pushed borrowers The conservative groups
to go into forbearance — a say Biden’s plan undercuts
temporary pause on pay- Public Service Loan For-
ments because of hard- giveness. The Mackinac
ship — even if they would Center and Cato Institute
have been better served say they employ borrowers
by enrolling in one of the who are working toward
income-driven repayment student loan cancellation
plans. through the program. They
Under the one-time fix, say Biden’s action illegally
past periods in forbear- accelerates progress to-
ance were also counted ward relief, diminishing
as progress toward Public the benefit for nonprofit
Service Loan Forgiveness, employers.q
a program that offers can-