(Natural News) President Joe Biden’s administration has been hit with a lawsuit seeking to block his executive order canceling thousands of dollars in student debt. The lawsuit claims the student loan relief plan will increase taxes for everybody.
Biden and Education Secretary Miguel Cardona revealed the White House’s plan to provide up to $20,000 in relief for people with student loans who meet certain conditions. The administration bragged that over 40 million people are eligible for the relief. But this executive order could be illegal according to a lawsuit filed in federal court. (Related: HIGHER EDUCATION ROBBERY: American taxpayers will be forced to pay an average of $5,200 each if student loans are cancelled.)
According to the government, it has the authority to forgive student loan debt under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which says that the Department of Education can “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” when “necessary in connection with a war or other military operation or national emergency.”
According to the original interpretation of the HEROES Act, only people with student loans who are serving on active duty during a war or national emergency, reside in an area declared a disaster area or who have suffered “direct economic hardship” as a direct result of a national emergency or a war are eligible for student loan relief.
Lisa Brown, a lawyer for the Education Department, claims the Wuhan coronavirus (COVID-19) pandemic qualifies as a national emergency under the HEROES Act.
“The Secretary could waive or modify statutory and regulatory provisions to effectuate a certain amount of cancellation for borrowers who have been financially harmed because of the COVID-19 pandemic,” wrote Brown in a legal memorandum for the Education Department.
Student loan relief would be considered taxable income in certain states
The lawsuit challenging the White House and the Education Department’s authority to forgive the student loans of tens of millions of Americans was filed in a federal court in Indiana on behalf of Frank Garrison, a public interest attorney working for the Pacific Legal Foundation, a pro-free market public interest law firm.
Garrison noted that he is in line to receive $20,000 in student loan relief under Biden’s plan. But he argues he will be left worse off by the debt relief because it will trigger state income taxes in his home state. Indiana is one of several states that has indicated it will impose a state tax on the amount of loan relief each person receives.
According to Garrison, Biden’s plan would force him to pay more in state income taxes that he would otherwise avoid.
Garrison noted that he has made regular payments to his student debt and is working to get his federal student loans forgiven under the Public Service Loan Forgiveness program in the next several years. Any debt that Garrison has forgiven under this program would not be treated as taxable income by Indiana.
“Mr. Garrison and millions of others similarly situated in the six relevant states will receive no additional benefit from the cancellation – just a one-time additional penalty,” reads the lawsuit.
The lawsuit further argues that Biden’s administration doesn’t actually have the power to enact such a sweeping debt relief program without congressional approval. Furthermore, the lawsuit is claiming that the HEROES Act giving the Education Department the power to modify the terms of federal student loans during so-called national emergencies is unconstitutional.
“Nothing about (the) loan cancellation is lawful or appropriate,” reads the lawsuit. “In an end-run around Congress, the administration threatens to enact a profound and transformational policy that will have untold economic impacts. The administration’s lawless action should be stopped immediately.”
The Pacific Legal Foundation is also asking a federal judge to grant their preliminary injunction and to pass a temporary restraining order halting the student loan relief program. The group is asking the judge to rule on the request before Oct. 1.
“The bottom line is this – the HEROES Act just doesn’t give the authority for the administration to forgive, on blanket basis, all of these loans,” said Steve Simpson, a senior attorney for the Pacific Legal Foundation.
Read more news related to Biden’s student debt forgiveness plan at DebtCollapse.com.
Watch this clip from InfoWars as host Harrison Smith discusses how Biden’s student loan relief plan is nothing but an open bribe for votes.
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