Trial held in six-state lawsuit against Biden administration student loan forgiveness

James Campbell, a lawyer from the Nebraska Attorney General’s office, represented six states in a trial on October 12 to block the Biden administration’s plan to forgive up to $20,000 of federal student loan debt in the United States District Court for the Eastern District of Missouri.

Campbell argued that the administration’s proposal would harm the investments and tax revenues of the states he was representing. He also argued the Department of Education did not have the authority under the Health and Economic Recovery Omnibus Emergency Solution (HEROES) Act to forgive federal student loan debts.

Brian Netter, the lawyer representing the U.S. Department of Justice, argued that the HEROS Act was designed to allow the executive branch to provide relief related to the coronavirus pandemic. He said increased late debt payments among student loan borrowers justified the forgiveness plan under the law.

U.S. District Judge Henry Autrey is presiding over the case and has not yet released a decision.

Six states (Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina) filed a joint lawsuit against the Biden administration on September 29. The states alleged the administration overstepped its executive authority and was “not remotely tailored to address the effects of the pandemic on federal student loan borrowers.” The states also argued that the Department of Education was legally required to collect student loans and could not stop collecting without congressional approval.

Of the six states, five have Republican trifectas and one (Kansas) has a divided government. All of the states except Iowa have Republican attorneys general.

If the forgiveness plan survives court challenges, it will cancel $10,000 in student loan debt per person for individual tax filers making less than $125,000 or married filers with less than $250,000 in income. Pell Grant recipients are eligible to have an additional $10,000 forgiven under the plan.

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Court cases related to federalism

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