Seven GOP-led states sue Biden admin. over new student loan forgiveness 'scheme'

A group of seven Republican-led states sued President Biden's administration over its latest student debt forgiveness plan, arguing that the Education Department lacks authority to unilaterally cancel student loans from repayment.

According to the lawsuit, the Education Department was preparing to cancel billions of dollars in student loans before formally finalizing a rule it proposed in April.

The rule is designed to provide waivers of federal student loan debts for an estimated 27.6 million student loan borrowers.

Last week, the U.S. Supreme Court blocked the Biden administration's attempt to bring back a separate student debt relief plan that was aimed at lowering monthly payments certain borrowers and fast-tracking student loan forgiveness for others.

The lawsuit said the Biden administration's actions would have resulted in about $73 billion in student loans getting cancelled overnight with more to follow.

“The Biden-Harris Administration is dedicated to saddling working Americans with Ivy League debt, even if they have to break the law to do it. Our latest lawsuit challenges their third and weakest attempt to mass-cancel student loans in the dark of night without letting Congress – or the public – know about it. That’s illegal,” said Missouri Attorney General Andrew Bailey in a statement.

"We successfully halted their first two illegal student loan cancellation schemes; I have no doubt we will secure yet another win to block the third one," he added.