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Republican-led States File a Lawsuit to Stop Biden’s Repayment Plan for Student Loans

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Seven Republican-led states, led by Missouri, have filed a court lawsuit in an attempt to thwart President Biden’s SAVE scheme, which is a scheme for repaying student loans. With this effort, which provides a quicker path to loan cancellation, over 150,000 borrowers have already benefited from forgiveness.

The complaint, which was submitted on Tuesday, claims that Biden’s proposal is an abuse of executive authority since it avoids Congress in favor of enacting an expensive and divisive policy. This action follows a prior ruling by the Supreme Court that invalidated Biden’s first attempt to cancel student loans.

The complaint lays the groundwork for future legal disputes even if it doesn’t specifically address Biden’s most recent request to cancel loans. The attorney general of Missouri has alluded to additional actions against the new scheme.

Citing Congress’s 1993 delegation of power, the Education Department has defended the administration’s right to set repayment terms.

The court battle is reminiscent of an earlier conflict between Missouri and the Biden administration, which was crucial to the Supreme Court’s ruling last year. The lawsuit claims that organizations such as MOHELA, the Missouri Higher Education Loan Authority, would suffer from the SAVE Plan’s accelerated loan cancellation.

Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma have joined Missouri in the lawsuit.

Launched last year, Biden’s SAVE Plan seeks to alleviate debt for borrowers by offering more lenient terms, such as lower monthly payments and loan forgiveness in as short as ten years.

According to the lawsuit, the scheme jeopardizes already-existing loan forgiveness programs and puts state efforts to hire and retain employees at risk.

Republican officials have criticized Biden for proposing additional methods to lower or cancel student loans for millions of Americans, arguing that doing so would be an unconstitutional way to circumvent Congress.

Political and legal tensions are continuing to rise, which is intensifying the legal battle over student loan payments. As the situation changes, keep checking back for updates.

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