President Joe Biden's student debt bailout plan is once again facing legal challenges after being scaled back following its defeat in the Supreme Court. The new plan involves forgiving the federal student loans of 800,000 borrowers, amounting to approximately $39 billion. Two think tanks, the Mackinac Center for Public Policy and the Cato Institute, have filed a lawsuit challenging the plan, arguing that the Department of Education is exceeding its authority and asking the judge to rule it illegal.
The Education Department has dismissed the lawsuit as a "desperate attempt from right-wing special interests" to keep borrowers in debt. They have stated that they will not back down in defending working families.
Biden's original student debt forgiveness plan aimed to relieve up to $20,000 of federal debt for an estimated 43 million borrowers. However, it faced legal challenges from several states that argued it would unlawfully relieve loans they were responsible for, potentially costing them millions of dollars annually. The Supreme Court ultimately ruled the plan unconstitutional on June 30, casting doubt on Biden's campaign promise.
The administration then introduced a scaled-back version of the plan on July 14. Education Secretary Miguel Cardona emphasized the need to correct past administrative failures and provide debt relief to borrowers who had been neglected by the system. The $39 billion in debt relief would benefit an additional 804,000 borrowers.
The legal challenges to Biden's student debt bailout plan highlight the ongoing debate surrounding the authority of the Department of Education and the question of how to address the burden of student loans. Supporters argue that debt relief is necessary to level the playing field in higher education, while opponents raise concerns about the potential costs and the role of the federal government in such matters.
As the legal battle unfolds, it remains to be seen how the courts will determine the legality of Biden's scaled-back plan and the extent to which the government can intervene in the student debt crisis. Both sides are passionate in their arguments, but it is crucial to approach this issue from an unbiased perspective to ensure a fair and balanced resolution.