November 28, 2022

WASHINGTON — Six Republican-led states took legal action Thursday to block President Biden from wiping away billions of dollars in student loan debt, even as the administration tried to avoid a court challenge by reducing the number of people eligible for relief.

A lawsuit filed in federal court by Leslie Rutledge, the Republican attorney general of Arkansas, accuses Mr. Biden of vastly overstepping his authority last month when he announced the government would forgive as much as $20,000 per person in student loan debt, a far-reaching move that the nonpartisan Congressional Budget Office estimated could cost $400 billion over the course of the next three decades.

“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,” Ms. Rutledge said in a statement on Thursday. “President Biden does not have the power to arbitrarily erase the college debt of adults who chose to take out those loans.”

In a news release on Thursday evening, the Education Department issued its own estimate of the program’s cost: $30 billion a year over 10 years, with a total cost of $379 billion over the life of the program. Department officials said they estimated that some 81 percent of eligible borrowers would apply for relief. (The C.B.O. estimate said that as many as 90 percent would apply, a number that was initially downplayed by White House officials.)

Administration officials have argued that the yearly cost of the program is a more effective measure than the total cost over a number of years, citing uncertainties in the student loan market and the economy.

Shortly after Mr. Biden announced the program in late August, White House officials said it would cost around $24 billion per year. On Thursday evening, however, officials in the administration were embracing the Department of Education’s estimate.

The legal challenge could delay one of Mr. Biden’s signature achievements just weeks before midterm elections that will determine who controls Congress for the balance of the president’s term. Nearly 40 million people with outstanding college loans stand to benefit under the president’s plans, even after the administration cut about 700,000 borrowers from the program on Thursday in an attempt to ward off lawsuits.

The states of Kansas, Missouri, Iowa, South Carolina and Nebraska joined the lawsuit, which attacks Mr. Biden’s claim that the debt relief is justified by a federal law authorizing actions during a health emergency like the coronavirus pandemic.

The Republican officials in those states note that Mr. Biden recently declared the pandemic to be over in an interview with “60 Minutes” on CBS.

Abdullah Hasan, a White House spokesman, said the lawsuit is attempting to stop Mr. Biden from providing much-needed relief to people who are struggling in the wake of the pandemic.

“Republican officials from these six states are standing with special interests and fighting to stop relief for borrowers buried under mountains of debt,” Mr. Hasan said. “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, first reported by The Associated Press, is the second attempt this week to shut down the loan forgiveness program, which is one of the president’s major achievements during nearly two years in office. On Tuesday, a conservative legal group filed a lawsuit seeking to block debt cancellation, saying the program would force people to pay taxes on the debt that was forgiven.

Before the latest legal challenges, the Education Department on Thursday announced that it would no longer forgive the debt for students with federal student loans that are held by private companies. Eliminating eligibility for those students could make it harder for the Republican attorneys general to successfully attack the entire program in court.


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There are only about 770,000 people who hold that kind of debt, out of about 40 million who would still be able to apply for relief, according to officials. Students with federal student loans would be eligible for $10,000 in relief, while those with Pell grants for people from low-income families would be able to apply for $20,000 in debt cancellation.

Mr. Biden debated for more than a year before announcing the new policy last month, making good on a campaign promise that had helped him win support from progressives and students.

But the decision triggered fury from many conservatives, who argued that Mr. Biden was shifting a huge financial burden from students who had taken out loans to taxpayers who had paid for college without taking out loans or had chosen not to go to college in the first place.

The president’s move to forgive the student debt also has drawn criticism from some liberals, who argued that it does not go far enough, and others who have said the plan would cancel debt for some students who are likely to be wealthy enough to pay the loans back.

Administration officials said the president had the legal authority to cancel the debt based on a 2003 law known as the Heroes Act, which gave the education secretary the power to waive regulations related to student loans during times of war or national emergency. The United States is still under the state of emergency that President Donald J. Trump declared at the beginning of the pandemic in March 2020.

The lawsuit by the Republican officials argues that the authors of the Heroes Act never intended it to be used for something like nationwide debt relief. In a brief filed with the U.S. District Court for the Eastern District of Missouri, the state officials note that the law had previously been used to waive bureaucratic rules related to student loans for people on active duty in the military.

“No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed,” the brief argues. “It is inconceivable, when it passed the Heroes Act, that Congress thought it was authorizing anything like the administration’s across-the-board debt cancellation, which will result in around half a trillion dollars or more in losses to the federal Treasury.”

One of the first hurdles for the Republican officials is establishing that they have the “standing” to challenge the president’s policy, by demonstrating that the interests of their states will be harmed if the student debt relief goes into effect. If the court determines that the officials do not have standing, the case will not proceed.

In their brief, the Republican state officials argue that Mr. Biden’s policy change would harm private companies in their states that service some federal student loans. That in turn could make it more difficult for the states’ residents to obtain loans to attend college.

Politically, the lawsuit by the Republican officials could deprive Mr. Biden and Democrats of a significant victory just weeks before the midterm elections. Many parts of the president’s coalition — especially young people — were energized by his announcement.

But there is evidence that the president’s policy of canceling debt would disproportionately benefit lower- and middle-income people in the South and in rural areas — many of which are heavily Republican communities. A study by Liberty Street Economics found that places with the highest average amount of student debt are Washington, D.C.; North Carolina; Georgia; South Carolina; Alabama; Mississippi; and West Virginia.

On Thursday, even as Republican officials filed the lawsuit, Mr. Biden’s administration pushed forward, rolling out new details about how students will apply for debt cancellation and using social media to publicize the program.

In a series of tweets from the official White House Twitter account, the administration said people with student loans would be able to apply from October 2022 through Dec. 31, 2023, and urged students to do so.

“The application will be short and simple,” one of the tweets said. “You won’t need to log in with your FSA ID or upload any supporting documents to complete it.”

Katie Rogers contributed reporting.

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