WASHINGTON, September 27 (CNNBreakingNews.net) — Conservative Group Pacific Legal Foundation filed a federal lawsuit on Tuesday against the U.S. Department of Education to stop President Joe Biden’s student loan termination plan.
The lawsuit, which was filed in the US District Court for the South District of Indiana, comes a day after the Congressional Budget Office (CBO) said that Biden’s plan to cut some student loan debts will cost $400 billion.
“Congress has not authorized the executive branch to cancel students’ debts unilaterally,” said Caleb Kruckenberg, a lawyer at Pacific Legal Foundation “It is blatantly illegal for the executive branch to create a $500 billion program via press release, without legal authority or even the basic termination and comment process for new regulations.”
Biden said in August the US government would pay $10,000 in student loans for millions of debt-burdened former college students who have a Delivering on promises he made for the White House in the 2020 campaign.
Critics of the plan raised concerns about its inflationary effects, while the White House said the plan was tax-justified, Because the federal deficit was on track to reduce $1.7 trillion for fiscal year 2022 compared to the previous year. The lower deficit is primarily due to the end of many COVID-19 relief programs and unexpectedly higher revenues.
The Department of Education did not immediately respond to a request for comment.
June 30, 43 million borrowers held 1.6 trillion US dollars in federal student loans. The CBO estimates that around 430 billion US dollars of this debt will be repaid. The CBO previously predicted that some of the funds canceled by Biden’s action would have been awarded anyway.
CNNbreakingnews.net reported in August that budget analysts from non-governmental organizations reduced the 10-year total cost of the program to $ predicted 500 billion to 600 billion US dollars, including extending a repayment break for all federal student loans until December 31 and reducing future payments based on income.
“It (Biden’s plan) will only result in more calls for government intervention in education at the expense of taxpayers,” said Steve Simpson, another Attorney with the Pacific Legal Foundation.