A group of 10 state Attorneys General — all Republicans — have filed a lawsuit against the federal government, seeking to block the enactment of an income-driven repayment plan saying it is another attempt at government overreach in the student loan arena and does nothing but transfer wealth from low-income individuals to people with higher incomes.
The federal government last year announced the launch of a new initiative called the Saving on a Valuable Education (SAVE) program. Under the plan, individuals who are making less than $15 per hour will not have to make any payments on their student loans and those making more than that will save more than $1,000 per year compared to other income-driven repayment programs, according to the Department of Education. As long as individuals continue to make their payments, the balances on the unpaid debt will never increase because the payments are not covering the interest that is accruing on the debt.
“The Biden-Harris Administration won’t stop fighting to provide support and relief to borrowers across the country,” said spokesperson for the Department of Education, according to published reports, “no matter how many times Republican elected officials try to stop us.”
The attorney general of Kansas is leading the suit, and has been joined by the AGs of Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah. Their claim is that this program is no different than previous attempts by the government to cancel or forgive student loan debt, which have been declared to be illegal by the Supreme Court.
“Last time Defendants tried this the Supreme Court said that this action was illegal,” according to the complaint. “Nothing since then has changed.”
The AGs also claim that the program “is essentially a multi-hundred-billion-dollar vote-buying scheme.”
