Lawsuit aims to stop Biden's student loan forgiveness plan

[BumRushDaShow]

Source: Washington Post

A public interest lawyer in Indiana is suing to block President Biden's plan to cancel some student debt, arguing that the policy will force him to pay state taxes on the forgiven amount. The lawsuit, filed in U.S. District Court for the Southern District of Indiana Tuesday, is the first significant legal action seeking to invalidate Biden's policy before it takes effect.

The Pacific Legal Foundation, the conservative public interest law firm in California that is backing the new lawsuit, asserts that the executive branch lacks the authority to create a new forgiveness policy and is usurping Congress's power to make law. Plaintiff Frank Garrison works for the foundation.

The argument is in line with other objections to Biden's plan, but the foundation may have the one thing legal experts said was needed to make a legitimate case, a client with the standing to sue. Garrison said he has been working toward having his federal student loans canceled through a program that erases the debt of public servants after 10 years of payments and service.

Participants in that Public Service Loan Forgiveness program do not have to pay federal or state taxes. However, Biden's plan could result in borrowers in several states, including Indiana, being required to pay local tax bills. Since Biden's plan would take effect before Garrison's debt is forgiven through the public service program, Garrison said he expects to pay more than $1,000 in state income taxes for the $20,000 of forgiven debt.

Read more: https://www.washingtonpost.com/education/2022/09/27/lawsuit-student-loan-forgiveness/

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Updated no paywall link

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[SheltieLover]

1. Suit should be directed at state.

[iluvtennis]

9. Agree. n/t

[LiberalFighter]

12. My thought too. Or move to a state that doesn't tax it.

[Walleye]

2. Fucking ingrate. So the red states finally found a way to fuck over the student loan thing

They didn’t have to impose taxes on that as income. I don’t see how it’s income anyway.

[Lemon Lyman]

3. SMH

These damn frivolous lawsuits & activist judges.

[MichMan]

4. Could the President issue another EO stating the federal gov. will pay for any state taxes owed ?

[BumRushDaShow]

8. ...

Article I

(snip)

Section 9.

(snip)

No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.

(snip)

https://www.law.cornell.edu/constitution/articlei

[bucolic_frolic]

5. That is basically same as case to overturn ACA Obamacare - taxation issues

The only difference here is does the President have the authority to do it unilaterally in the executive branch.

[Novara]

6. He's suing over forgiven debt?

He's suing because he'll have to pay $1,000 tax instead of a $20,000 loan? Plus interest? It's gotta cost more than that to pursue this case.

What a fucking moron.

[SuperCoder]

7. They just cannot stand....

Something GOOD happening to the American people.

[SunSeeker]

10. If he's conservative, he's not "public interest." He's all about private interest.

[LetMyPeopleVote]

11. The MAGA assholes have been promising lawsuits

[Bayard]

13. All this over $1,000?

He had to pay more than that as a retainer to an attorney.

[Shrek]

14. He works for the foundation that filed the suit

I doubt they're charging him anything since this was most likely their idea. They're just using him as a plaintiff since he has a plausible case for standing.

[Traditional Liberal]

15. What took them so long

They waited to file the lawsuit to not affect the optics until after midterms. The 10k forgiveness was a mistake. He should have just fixed the interest at 0.5 percent, and told anyone who has already paid more than their principal that they can stop paying.

And then told Congress that it would stay that way until they fixed the whole problem.

He missed his chance to put the pressure on Congress to do something.