President Joe Biden’s plan to cancel billions in federal student loan debt is facing a new legal challenge, this time from six conservative-leaning states.
Arkansas is leading the charge, joined by Iowa, Kansas, Missouri, Nebraska and South Carolina.
Arkansas Attorney General Leslie Rutledge, who had said she was willing to challenge the administration’s plan to cancel student loan debt, in a Thursday press conference called it a disgrace that “the president is trying to bail out adult college students who voluntarily took out these loans.”
It’s the second challenge to Biden’s proposal this week, and it comes just days before the administration’s early-October plan to share an application for people who want debt relief.
Rutledge, who said her office filed the suit Thursday, said Biden acted beyond his authority. She said the president has declared the pandemic over and questioned how he could discharge student debt now, using the impact of coronavirus as a justification.
The states are seeking a preliminary injunction – which would halt the administration’s plans – given the Education Department may begin discharging debts in October.
“When President Biden attempts to circumvent the Constitution in order to deliver on a political promise, myself and other state attorneys general take issue with this,” Rutledge said.
She said the state had standing to file the lawsuit because it will be hurt by the debt cancellation. Specifically, the state said the Arkansas Student Loan Authority, a state agency that offers private student loans to cover higher education costs, said a drop in revenue would affect its ability to offer new loans.
Earlier this week, the Pacific Legal Foundation also filed a suit against the administration, saying some borrowers would be hurt by the debt cancellation. Specifically, some states plan to tax the debt forgiveness, and the foundation, a libertarian-aligned law firm, argued that borrowers residing in those states would be harmed by widespread debt discharge.
But White House press secretary Karine Jean-Pierre said Monday that borrowers are allowed to “opt out” of debt cancellation if they choose. She accused opponents of trying to stop Biden’s action on student loan debt “because they know it will provide much-needed relief for working families.”
How many borrowers are in the states represented by the suit?
Approximately 2.8 million student loan borrowers are eligible for some amount of student debt cancellation in the six states represented in the suit, according to data from the White House:
- Arkansas has roughly 365,000 borrowers
- Iowa has roughly 408,000 borrowers
- Kansas has roughly 361,000 borrowers
- Missouri has roughly 777,000 borrowers
- Nebraska has roughly 232,000 borrowers
- South Carolina has roughly 681,000 borrowers
When asked about Arkansas residents with student loans, Rutledge encouraged them to pay their debts.
“You took out that loan with a promise that you would pay it back,” she said. “Do what I did and pay that loan back. Don’t put your loans on the back of someone else who didn’t benefit with a college degree like you did.”