At least three appeals have been filed so far
On September 27, Frank Garrison, an attorney working for a conservative legal group, filed the first legal challenge to Biden’s plan, arguing that an amnesty would cause him personal harm in the form of a state tax bill.
Canceled student debt can be considered taxable income. Although borrowers won’t be required to pay federal taxes on canceled student debt, thanks to the Covid-era relief provision in the 2021 US bailout, some states — including Indiana, where Garrison resides — may tax relief.
Currently, Garrison is pursuing a government program that leads to tax-free debt cancellation, known as Public Service Loan Forgiveness, but he says Biden’s plan could now get him a $1,000 state tax bill.
Two days later, on September 29, six Republican-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — filed a lawsuit to block Biden’s action. State officials in the Republican Party argue that the president does not have the authority to issue debt forgiveness nationwide without Congress. They also claim that the policy will harm the private companies that serve some federal student loans by reducing their business.
On the same day, Arizona Attorney General Mark Brnovich filed his legal challenge to stop the Biden administration’s plan. Brnovich stresses that the policy will reduce the impact of the Public Service Loan Forgiveness Program, which he says enables his office to hire legal talent.
The PSLF program allows those who work for the government to forgive their debts after a decade. Brenovich argues that if borrowers’ loans were simply paid off now, they would have less incentive to work in a state office. Lawyers in private practice tend to get paid more.
“There is little point in challenging”
The main obstacle for those hoping to file a legal challenge against Biden’s plan is finding a plaintiff who can prove that they are harmed by the policy. “Such mischief is necessary to determine what the courts call ‘status,'” said Lawrence Tribe, a Harvard law professor.
The tribe is not convinced that the current lawsuits filed have done so successfully.
“They keep looking for different ways to solidify their position, and that’s all well and good, but in the end, it’s the merits that count, and there’s little point in challenging them,” Tribe said.
Legal and higher education expert Mark Kantrowitz said it’s possible for a judge to shrug off an issue that is imperfect in standing, however, because of the larger questions posed here, including the president’s scope of authority.
“The president’s student loan forgiveness plan will likely be nullified if it reaches the US Supreme Court,” Kantrowitz said.
Legal Action Can Delay Forgiveness
Valentinrosanov | E + | Getty Images
Whether or not these challenges work out in the end, they are likely to slow down the timeline for forgiveness.
With a federal judge deciding whether or not to grant Republican-led states’ request to block Biden’s plan, the administration has already said it will not cancel any student debt before October 17.
Kantrowitz said the policy could be “restricted in the courts for months”.
Court fights may prolong payment halt
Kantrowitz said that if the battle over student loan forgiveness continues, the Biden administration may decide to extend the moratorium on monthly payments again.
Currently, the bills, which have been on hold since March 2020, are scheduled to resume in January. But it can be too messy to restart it while it’s still uncertain what people owe it because forgiveness is up in the air.
For now, borrowers have to keep up with developments. You can register on the Department of Education’s website for news about the process, including when the forgiveness application will start.
Ideally, you’ll be ready to seek relief once the form is released, experts say. Kantrowitz said that if your loans are waived before a lawsuit gets in the way, you may be able to keep them, “even if the courts rule against the Biden administration.”
Originally published at Brisbane News Station
No comments:
Post a Comment