Anyone surprised with this?
The Biden admin certainly isn’t….
The New Civil Liberties Alliance (NCLA) filed a lawsuit Friday against the Biden administration’s new student loan income-driven repayment (IDR) plan.
The lawsuit comes after the Department of Education launched a beta website this week for the Saving on Valuable Education (SAVE) application, the new IDR plan the White House has dubbed the “most generous” for student borrowers.
The NCLA, on behalf of the Cato Institute and the Mackinac Center for Public Policy, filed a suit in the U.S. District Court for the Eastern District of Michigan to stop the implementation of this plan.
The NCLA is arguing that the new IDR plan violates the Constitution’s Appropriations Clause, which allows Congress to be in charge of what debt owed to the Treasury can be canceled.
Under the SAVE plan, loan forgiveness would come quicker for many borrowers. For one, the plan allows borrower whose student loan has an original principal balance of $12,000 or less to get forgiveness after 10 years of payments.
It also allows certain periods of deferment and forbearance to count toward the time needed to get full forgiveness on an individual’s loan….
“The [Public Service Loan Forgiveness] and IDR statutes require borrowers to make a certain number of monthly payments before earning forgiveness. By trying to count non-payments as payments, the strategy seems to be to cancel $39 billion faster than a court can review and stop this blatantly unlawful act,” Li continued….
The challenge to the SAVE plan comes two months before student loan borrowers will be forced back into repayment after the three-year COVID-19 student loan pause….