Eleven Republican-led states have initiated a legal challenge against President Biden’s new student loan repayment program, alleging similarities to a previously invalidated debt relief initiative. Led by Kansas Attorney General Kris Kobach, the lawsuit contends that Biden’s Saving on a Valuable Education (Save) program exceeds his constitutional authority and mirrors a past forgiveness plan that the Supreme Court struck down last year.

Allegations and Legal Basis

The lawsuit, spearheaded by Kansas AG Kris Kobach, asserts that President Biden’s Save program constitutes executive overreach and draws parallels to a previously rejected debt relief initiative.

Want to know if you’re earning what you deserve? Find out with LawCrossing’s salary surveys.

Description of the Save Program

President Biden’s Save program, launched in October, aims to provide reduced monthly payments and an accelerated path to loan cancellation for millions of borrowers. While it has already relieved the debts of over 150,000 participants who borrowed under $12,000 and made payments for a decade, its projected cost varies significantly. The Biden administration estimates the program to cost $156 billion over a decade, whereas the Congressional Budget Office predicts a higher figure at $230 billion.

Legal and Administrative Responses

Kansas AG Kobach criticized the Save program, accusing the president of pushing forward despite past legal setbacks. The Education Department refrained from commenting on the lawsuit but reiterated its commitment to enhancing the student loan system and offering relief to borrowers.

Legal Grounds and Previous Challenges

The lawsuit draws upon arguments from previous legal battles against broad-based debt relief. Unlike the failed plan that relied on a 9/11-era law, the Save program derives its authority from the Higher Education Act, presenting a different legal foundation.

Stay up-to-date without the overwhelming noise. Subscribe to JDJournal for a curated selection of the most relevant legal news.

Program Mechanics and Conservative Criticism

The Save program, an adaptation of the existing Revised Pay as You Earn (Repaye) plan, ties monthly payments to income and family size. However, conservatives like Kobach argue that widespread debt relief unfairly burdens taxpayers who did not attend college or save for their education.

Legal Landscape and Political Response

The lawsuit follows the Supreme Court’s rejection of a similar debt cancellation program last year, highlighting the ongoing legal and political battles surrounding student loan relief initiatives. Missouri Attorney General Andrew Bailey expressed support for Kobach’s lawsuit and hinted at filing a related one.

Administration’s Perspective

Despite facing legal challenges, the Biden administration continues to advocate for the Save program, emphasizing its potential to alleviate the financial burden for millions of borrowers by reducing their annual payments.

Don’t be a silent ninja! Let us know your thoughts in the comment section below.

The post Republican-Led States Challenge Biden's Student Loan Repayment Program first appeared on JDJournal Blog.

Seasonal Generosity or Expensive Agenda?

As we bid farewell to Thanksgiving, we ushered into the festive aura of Christmas. It’s a time when benevolence seems to permeate the air and for none more so than President Joe Biden, who, it seems, is embracing the holiday spirit with open arms—particularly when it comes to your hard-earned money.

The Aftermath of a Supreme Court Setback

After the U.S. Supreme Court struck down Biden’s unilateral attempt to forgive a substantial chunk of student loans, he has been on a relentless quest to find alternative routes. His latest move, however, raises concerns for those who’ve settled their loans and the millions who chose a different educational path altogether.

The Unraveling of Biden’s Student Loan Strategy

A Costly Pivot

President Biden’s previous attempt at unilateral loan forgiveness faced a legal dead-end. Undeterred, he now pivots to what critics call a ‘sneaky’ alternative plan, aiming to make a significant impact before the next presidential election.

Want to know if you’re earning what you deserve? Find out with LawCrossing’s salary surveys.

The SAVE Program Unveiled

Dubbed the “Saving on a Valuable Education (SAVE)” program, this initiative aims to expand income-driven repayment plans, a move some argue exceeds the intended scope of the Higher Education Act. Unlike previous attempts, this plan is touted as permanent, potentially affecting millions of Americans.

The Financial Implications

Affordability at Whose Expense?

The SAVE program broadens caps on monthly payments based on income and family size, offering interest subsidies and, for some, the prospect of eventual loan forgiveness. The White House bills it as the “most affordable student repayment plan ever,” but questions linger: Affordable for whom?

The True Cost of Forgiveness

While individual borrowers may find relief, the financial burden ultimately falls on taxpayers. According to the Penn Wharton Budget Model, the SAVE program is estimated to cost $475 billion over ten years. The House Committee on Education & the Workforce suggests an even higher figure, potentially making it the “costliest regulation in U.S. history.”

Make informed decisions in real-time. Subscribe to JDJournal and be informed of the latest legal updates.

Unintended Consequences and Critical Voices

A Dubious Safety Net

Nat Malkus, deputy director of education policy studies at the American Enterprise Institute, warns of unintended consequences. He suggests that these changes could transform income-driven repayment plans into a hybrid loan-grant system, a far cry from Congress’s original intentions.

The Mask of Loan Forgiveness

While widespread loan forgiveness might provide a temporary solution, critics argue that it masks the more profound issues plaguing the soaring costs of higher education. Moreover, it may inadvertently exacerbate the problem.

Don’t be a silent ninja! Let us know your thoughts in the comment section below.

The post ‘Tis the Season for Biden’s Costly Holiday Gift: The SAVE Program first appeared on JDJournal Blog.