More states sue to block Biden’s student loan repayment plan

WASHINGTON >> Another group of Republican-led states is suing to block the Biden administration’s new student loan repayment plan, which offers a faster path to cancellation and has already been used to forgive loans for more than 150,000 borrowers.

Seven states led by Missouri filed a federal lawsuit Tuesday challenging Biden’s SAVE Plan, which has become a new legal target for conservative opponents after the Supreme Court toppled the Democratic president’s first attempt at student loan cancellation. It largely mirrors another suit filed last month by Republican attorneys general in 11 states, led by Kansas.

“Yet again, the President is unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress,” according to the new suit.

Filed just a day after Biden trumpeted a new proposal to cancel student loans for millions of borrowers, the lawsuit sets the stage for one legal battle and foreshadows another. The suit doesn’t directly challenge Biden’s newest plan for cancellation, but its architect, Missouri’s attorney general, separately threatened to bring action against that plan, too.

A statement from the Education Department says Congress gave the agency power to define terms of certain repayment plans in 1993, and that authority has been used before.

“The Biden-harris Administration won’t stop fighting to provide support and relief to borrowers across the country — no matter how many times Republican elected officials try to stop us,” the department said.

The lawsuit reprises a courtroom showdown between the Biden administration and Missouri, which was a central figure in the Supreme Court case that overturned the Democratic president’s first try at loan cancellation last year.

In that case, the Supreme Court found that loan cancellation would harm Missouri because of its affiliation with a quasi-state loan servicing company, MOHELA, that stood to lose revenue generated by federal student loans.

The new lawsuit makes a similar argument. Biden’s new SAVE Plan speeds up an existing path to loan cancellation, which the suit says would deprive MOHELA — the Missouri Higher Education Loan Authority — of “up to 15 years in servicing fees.”

Also joining the suit are Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.