Arkansas, 5 other states sue Biden administration over student loan debt cancellation plan

Arkansas Attorney General Leslie Rutledge, at a Thursday news conference in Little Rock, announces that she has joined with attorneys general from five other states to file a federal lawsuit against the Biden administration over its student loan forgiveness plan.
(Arkansas Democrat-Gazette/Thomas Metthe)
Arkansas Attorney General Leslie Rutledge, at a Thursday news conference in Little Rock, announces that she has joined with attorneys general from five other states to file a federal lawsuit against the Biden administration over its student loan forgiveness plan. (Arkansas Democrat-Gazette/Thomas Metthe)


Arkansas and five other states are suing the Biden administration over its plan to cancel some debt for those who took out loans to attend college, Arkansas Attorney General Leslie Rutledge announced Thursday.

The lawsuit, filed Thursday in the U.S. District Court for the Eastern District of Missouri, alleges President Joe Biden violated federal law and exceeded his constitutional authority by issuing an executive order to cancel student debt for some borrowers. Rutledge said the states seek an immediate order from a federal judge to block loan forgiveness payments that could begin next week.

Arkansas joins Iowa, Kansas, Missouri, Nebraska and South Carolina in the lawsuit. Along with Biden, the lawsuit names the U.S Department of Education and Secretary of Education Miguel Cardona as defendants.

"President Biden's unlawful political play puts the self-wrought college-loan debt on the backs of millions of hardworking Americans who are struggling to pay their utility bills and home loans in the midst of Biden's inflation," Rutledge said in a statement. "President Biden does not have the power to arbitrarily erase the college debt of adults who chose to take out those loans."

Biden announced in August a plan to cancel student loan debt, following through on a campaign promise to provide relief to millions of Americans struggling to pay back student loans. Republicans criticized the idea, saying it was a political move by Biden to garner votes before the midterm elections.

The program could wipe out the entirety of student loan debt for roughly 125,000 Arkansans. Under the proposal, borrowers could have up to $10,000 of their student loan debt forgiven. If the borrower qualified for Pell grants the amount of debt that could be canceled could be as much as $20,000.

Biden's announcement drew unified criticism from Republican lawmakers in Congress who said Biden did not have the power to issue an executive order to cancel student loan debt. Biden said economic challenges from the covid-19 pandemic created a need to provide relief for those with student loan debt, citing a 2003 law that gives the federal government power to cancel debt after a disaster.

The lawsuit cites an interview Biden did with CBS' 60 Minutes where he said "the pandemic is over" as evidence the executive order was an overreach, with the lawsuit stating no law allows the president "to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed."

Rutledge and other GOP attorneys general said the debt cancellation was a violation of the constitution's separation of powers and violation of the Administrative Procedure Act, saying any authority to cancel debt lies with Congress, not the president.

For weeks, Republican lawyers looked for a way to sue the Biden Administration over the student debt plan, looking for standing. Rutledge who pledged to "take action" against the administration in a Fox Business interview in August, said Thursday that Arkansas found standing through the Arkansas Student Loan Authority, a division of the Arkansas Department of Commerce.

"The state itself, through the student loan authority, finances student loans and administers those loans," said Dylan Jacobs, deputy solicitor general. "The mass debt cancellation will result in a significant drop in revenue that can be used for new student loans, financing."

In Arkansas, there is $13 billion in student loan debt with 350,000 to 400,000 borrowers with the average borrower having $33,000 in debt, according to Tony Williams, director of the Arkansas Student Loan Authority.

For Arkansans with student loan debt, Rutledge said borrowers should not be looking for relief from the federal government.

"What I would say to Arkansans who took out student loans, that go to college, is to do what I did and pay off that student loan," Rutledge said. "This loan forgiveness, mass-debt cancellation, is going to fall on the backs of our plumbers, our electricians, our nurses, teachers, others who perhaps didn't have student loans."

A White House spokesperson, Abdullah Hasan, said the lawsuit is an attempt to stop federal action that would provide relief to middle-class Americans.

"Republican officials from these six states are standing with special interests and fighting to stop relief for borrowers buried under mountains of debt," Hasan told the New York Times. "The president and his administration are lawfully giving working- and middle-class families breathing room as they recover from the pandemic and prepare to resume loan payments in January."

The lawsuit filed Thursday is not the first to try to halt Biden's student debt cancellation plan. On Tuesday, the Pacific Legal Foundation, a conservative legal group, announced a lawsuit against student debt forgiveness, saying taxpayers would have to fund the canceled debt, the New York Times reported.

Republicans also have criticized the loan forgiveness plan's cost. According to the Congressional Budget Office, the program will cost $400 billion over the next three decades. The White House responded by saying the Congressional Budget Office's estimate of what the plan will cost in its first year, $21 billion, is less than what the Biden administration previously thought, according to reporting from The Associated Press.

Gov. Asa Hutchinson, a critic of Biden's loan forgiveness plan, said in a statement he supports the state's lawsuit.

"Broad student loan forgiveness is a misuse of executive authority," Hutchinson said. "Shifting the burden of $400 billion in arbitrary student loan forgiveness to all taxpayers is inconsistent with the American ideals of personal responsibility and fairness."

Jesse Gibson, the Democratic nominee for attorney general, called the lawsuit partisan and a waste of state funds.

"Our current Attorney General cannot help but file frivolous lawsuits based on political maneuvering and not what is best for Arkansas," Gibson said in a statement. "While hardworking Arkansans are paying her salary, she is joining in on a partisan attack."

Republican candidate for attorney general and current Lt. Gov. Tim Griffin said he supported the lawsuit against Biden's student loan debt forgiveness plan.

"President Biden's unilateral forgiveness of student loans is not only bad public policy, it also demands a legal challenge because the administration lacks authority for its action," he said.

Before the lawsuit was filed Thursday, the U.S. Department of Education announced it would no longer forgive the federal student loan debt held by private companies, which could make it harder for Republican states to attack Biden's program in court, according to the New York Times.

According to officials the change affects 770,000 people who hold that kind of debt out of 40 million who could still get some relief under the program.

Information for the article was contributed by Ryan Anderson of the Arkansas Democrat-Gazette, Michael D. Shear of the New York Times and Seung Min Kim and Collin Binkley of The Associated Press.


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