LITTLE ROCK, Ark. – Arkansas is leading a six-state effort to challenge the Biden administration’s student loan forgiveness plan in federal court.
Attorney General Leslie Rutledge announced the suit Thursday during a news conference, calling loan forgiveness “another example of an unlawful emergency action taken by the president.”
The attorney general said the forgiveness plan was illegal because President Joe Biden used the 2020 Heroes Act as the basis for forgiveness.
The act was passed as a coronavirus pandemic relief package, but Biden using the measure to justify the loan forgiveness package should not be permitted, Rutledge said, citing his recent “60 Minutes” interview in which he declared the pandemic was over.
Rutledge also cited a 2021 statement by Speaker of the House Nancy Pelosi when she said, “People think that the president of the United States has the power for debt forgiveness. He does not.”
This statement was widely shared by Republicans after Biden announced the forgiveness package on Aug. 24, though Pelosi released a statement, also on Aug. 24, in favor of the proposal.
Rutledge said loan forgiveness would be “on the backs of millions of Americans” during current inflation pressures and predicted that the move would “result in a half-billion in losses to the federal treasury.” Instead, borrowers should “do what I did, pay the loan back,” she said.
The proposed loan forgiveness package would forgive at least $10,000 and extend the pandemic-related pause on student loan repayments through the end of the year. It met with resistance from Republican circles as soon as it was announced.
The states filing the suit maintain legal standing in this matter since the forgiveness materially impacts the states’ student loan servicers.
The lawsuit will be filed in the Missouri eastern district federal court and is being brought by Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina.
Rutledge told reporters the filing would be as soon as possible, perhaps by Friday. The suit will include a request for an immediate injunction to halt any action on loan forgiveness until the lawsuit is tried.
A legal advocacy group filed a lawsuit against the Biden plan on Sept. 27.
Arkansas is one of the states that would tax any amount forgiven under the student loan.