A federal judge on Thursday determined that the first legal challenge to President Joe Biden’s student debt cancellation plan would not bring irreparable harm to a borrower who argued that the automatic discharge could result in an unintended tax obligation.
Currently there are a total of three legal challenges to the administration’s student debt relief plans.
The lawsuit filed by the Pacific Legal Foundation, a nonprofit legal organization, was struck down Thursday, but plaintiffs plan to amend their complaint.
The judge urged the plaintiffs to, in their amended complaint, consider whether the plaintiff “or any additional plaintiffs,” have standing and whether the complaints are purely speculative, since ED’s rollout of the program “is still evolving.”
The Department of Education (ED) has begun to roll out its communication efforts with borrowers and has offered more parameters for debt cancellation, which will include an opt-out.
The second case was filed on Thursday by six Republican-led states, arguing that the administration’s plan oversteps executive authority.
The third and most recent challenge comes from Arizona’s attorney general office, which argues that the White House’s plan will make the Public Service Loan Forgiveness (PSLF) program a less valuable recruiting tool for its office.
“The office currently employs dozens of attorneys and non-attorneys who are proceeding under the PSLF program,” the legal filing states. “The proposed student loan debt cancellation removes one incentive for employment with government offices, thereby undermining the Attorney General’s Office to recruit talent.”
It is possible that more lawsuits could be forthcoming as the program is further finalized.
Publication Date: 10/3/2022