White House calls lawsuit to block student loan forgiveness ‘baseless’

  • A conservative legal organization has sued the Department of Education over Biden’s debt relief plan.
  • The White House said the suit’s claims were “baseless” in a statement to Insider.
  • The lawsuit likely has no status, experts told Insider, because the plaintiff can opt out of the relief.

A conservative group is challenging the legality of President Biden’s impending cancellation of student debt for millions of borrowers, and the White House has flatly denied all of its claims.

The Pacific Legal Foundation, a conservative nonprofit legal organization, announced on Tuesday that it has filed a lawsuit against the Department of Education over Biden’s relief plan, a move that comes after rumblings from advocacy groups. Tory cases and attorneys general that they would. This is the first major lawsuit against the Biden administration’s announcement that it would forgive up to $20,000 in student debt for federal borrowers earning less than $125,000.

The lawsuit claims the executive branch lacks the power to create pardon policy, saying it is solely within the power of Congress to create laws.

The White House has spoken out strongly against the claims of the Pacific Legal Foundation.

“The request is baseless for one simple reason: no one will be forced to get debt relief. Anyone who does not want debt relief can opt out,” said Abdullah Hasan, deputy press secretary from the White House, in a statement to Insider. “Why would this group make this baseless claim? Because opponents of the debt relief plan are trying everything they can to stop this program which will bring much needed relief to working families.”

The White House has said more than 40 million people are likely to be eligible for a pardon under Biden’s plan, with the first cancellations expected to occur before the end of the year. The plan will forgive up to $10,000 of debt for federal borrowers earning less than $125,000 a year and up to $20,000 for Pell Grant recipients.

Republican politicians have long opposed any Biden relief plan, with attorneys general in states including Texas, Missouri and Arizona recently confirming they are considering trying to block Biden’s plan. Congressional Republicans are also unhappy.

Pacific Legal Foundation plaintiff Frank Garrison is also unhappy with the remedy. Garrison, a public interest attorney with the legal organization, is currently repaying his loan debt through the Public Service Loan Forgiveness Program (PSLF). He expects to see full forgiveness in about four years.

However, Garrison now claims that because he qualifies for $20,000 relief, he will face a new tax burden from his home state of Indiana.

“The lawsuit that was announced today was an opportunistic challenge to the student debt forgiveness plan, where they tried to find the needle in the haystack,” said Abby Shafroth, attorney at National Consumer Law Center, to Insider. “They tried to find the one person who could really be harmed by the student debt cancellation plan that promises relief for up to 43 million working and middle-class Americans.”

Luke Herrine, an assistant professor of law at the University of Alabama who focuses on the legality of debt forgiveness, told Insider in an email that Garrison “probably does not have standing to sue.” . That’s because the basis of the argument – the new tax bill – hasn’t happened and may not happen, especially if Garrison can opt out.

“The big problem with all of his heartfelt claim is that the feds are going to have a withdrawal process, so no one who wants to leave their student debt in place won’t have to have it cancelled,” Shafroth said.

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