The first legal challenge to President Biden's plan to wipe out billions of dollars of federal student loans came on Tuesday when a lawyer for a conservative legal group filed a lawsuit.
Frank Garrison, a lawyer at the Pacific Legal Foundation, filed a complaint in the US District Court for the Southern District of Indiana. The administration should stop its actions immediately.
One of the biggest obstacles for those trying to fight Mr. Biden's plan in court is finding someone who has legal standing to argue that they would be harmed by the policy. Mr. Garrison argued that the plan to automatically cancel the debts of some borrowers would hurt him by forcing him to pay taxes on the forgiven debts.
Mr. Garrison has been trying to get loan forgiveness through a program for public service workers. He would be able to have his loan debt wiped out under that program.
Debts that have been canceled are taxed as income. Some states may choose to tax the federal taxes that were eliminated by Mr. Biden. Mr. Garrison said in his lawsuit that he expected a state tax bill on his canceled debt. According to the Tax Foundation, his state is one of seven in which officials have said that forgiven student debt may be taxed.
Who is eligible to have their loan canceled? If you are single and earn $125,000 or less, you will be eligible for the debt cancellation. If your income is less than $250,000 you can qualify if you are married and filing your taxes together. You could get an extra $10,000 in debt cancellation if you met the income requirements for the grant.
If I qualify, what should I do? Check with your loan servicer to make sure that your email address, phone number and postal address are listed correctly so that you can get guidance. Follow the directions. The Department of Education has a web page about who your servicer is.
I don't know how to prove that I'm qualified. If you have already submitted your most recent tax return to certify your income, you should not have to do anything else. Keep an eye out for your servicer's instructions. Everyone else will have an application process by the end of the year.
Payments for the outstanding balance will restart. Payments won't be due until at least January because of President Biden. If you don't get a billing notice at least three weeks before your first payment is due, you can contact your loan servicer to find out what you owe and when payment is due.
He requested an injunction to stop the Education Department from carrying out Mr. Biden's plan.
The White House said in August that up to eight million borrowers may be eligible for relief because the Education Department already had the necessary income information. Tens of millions of other borrowers will need to apply for debt cancellation using a form that will be released this month.
Mr Garrison believes that his debt will be canceled. The assumption is incorrect, according to a representative for Mr. Biden.
The White House will not force anyone to get debt relief. If you don't want debt relief, you can opt out. This baseless claim is brought by this group. The debt relief plan will provide needed relief to working families if opponents are successful in stopping it.
Steve Simpson, a senior attorney at Pacific Legal, which is representing Mr. Garrison, said that if borrowers can opt out, it will be a harder case. It would be difficult to argue that he has harmed anyone else.
Those earning less than $125,000 per year and those who had received grants for low-income families will be able to get rid of their debt. The cost of the plan was estimated by the Congressional Budget Office. The White House believed the cost could be lower because fewer borrowers would apply for the relief.
The Education Department did not reply to the request for comment. The department didn't say when or how it would implement debt relief.
If borrowers like him were given the option to opt out, Mr. Garrison's case would fail.
Mr. Herrine said that the conservative legal movement only found a suitable lawsuit on its own staff. Some are happy to have this relief or not.
The lawyers at Pacific Legal disagreed with Mr. Biden.
A lawyer for Mr. Garrison said that it was illegal for the executive branch to create a $500 billion program by press release.
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