Biden scales back student loan forgiveness

Six Republican-led states filed a lawsuit to block President Joe Biden’s student loan forgiveness plan, and he responded by omitting some of the older loans from the program. Privately-held loans that are guaranteed by the government — including Federal Perkins Loans and Federal Family Education Loans (FFEL)—were initially included in the one-time forgiveness plan. But as of Thursday, that deal was off the table. 

How and why are states are suing? State attorney generals in Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina filed suit Thursday at a federal court in Missouri. The suit asks for a temporary restraining order pausing the loan cancelation program. Nebraska Attorney General Doug Peterson said the mass debt cancelation was “fundamentally unfair” to those taxpayers who would benefit little from the plan. It would result in around half a trillion dollars in losses to the federal treasury, he said in a news release.

Dig Deeper: Listen to Nick Eicher interview David Bahnsen of the Bahnsen Group about President Biden’s student loan forgiveness program.