Judge dismisses legal challenge to Biden's student loan forgiveness plan

August 15, 2023

A federal judge ruled against a legal challenge designed to stop the Biden administration's revised plan for student loan debt forgiveness.

The lawsuit was filed by the New Civil Liberties Alliance on behalf of the Cato Institute and the Mackinac Center.

The plan

"The White House announced Monday that it would begin cancelling at least some debt for roughly 804,000 borrowers who have been in repayment for more than 20 years," Just the News reported.

"The Supreme Court, earlier this year, struck down Biden's original plan to forgive up to $10,000 in debt for most borrowers and as must as $20,000 for Pell Grant recipients. After that defeat, the administration announced an income-drive repayment plan," it added.

The response

"The district court did not rule on the merits of the case and instead said Cato and Mackinac were not the right parties to bring it," NCLA lawyer Sheng Li told Axios.

"We disagree with the court's conclusion regarding legal standing and are reviewing legal options with our clients," it added.

The details

"The plan, apparently, calls for borrowers to make payments equal to an absurdly low five percent of disposable income, with over $30,000 in income excluded," Minding the Campus reported.

"A new college graduate making $45,000 a year in his first job would face annual repayments of less than $1,000 a year; if the student had a rather modest $20,000 in debt, the interest payments on that debt would be greater than the repayment amount, meaning the debt would normally increase—but not under the new Biden plan," it continued.

The new plan would essentially serve as a deferred forgiveness plan for many, making payments zero or extremely low for many borrowers.

The Biden plan-B may become a key part of Biden's reelection push, with the win against the first legal challenge an important one for Democrats.

The move also comes as Trump faces additional charges in yet a fourth indictment in Georgia in what could be a 2024 rematch between Biden and the former president, with Trump facing dozens of charges as he seeks to return to the White House for a second term instead of Biden.

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