There’s finally been a lawsuit seeking to end Biden’s student loan forgiveness plan. We’ll discover below what the Washington Post managed to gloss over in its coverage:
A lawsuit seeking to block President Biden’s plan to cancel some student debt claims the policy is not only illegal but could inflict harm on borrowers in some states who would be forced to pay taxes on the forgiven amount.
The lawsuit, filed in U.S. District Court for the Southern District of Indiana on 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 lawsuit, asserts that the executive branch lacks the authority to create a new forgiveness policy and is usurping Congress’s power to make law. The suit was filed on behalf of Frank Garrison, an attorney who works for the foundation and lives in Indiana.
In its lawsuit, 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, although they would not be subject to federal taxes.
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 that he would be eligible for.
Again, what the WaPo and the New York Times both fail to mention that this lawsuit is being funded by billionaires, according to this excellent piece in Popular.Info:
But what you will not learn from either story is that the Pacific Legal Foundation receives extensive funding from right-wing billionaires. And this “public interest law firm” has a record of filing lawsuits that advance its donors’ economic and ideological interests.
Among the PLF”s major donors are entities controlled by right-wing billionaire Charles Koch, CEO of Koch Industries. A Popular Information review of tax filings from 2019 and 2020, the latest available, found that the Charles Koch Foundation and the Charles Koch Institute donated $2,331,550 to PLF in those two years.
In 2021, PLF filed suit “to strike down the Centers for Disease Control and Prevention (CDC) eviction moratorium, which [was] designed to protect millions of Americans from being thrown out of their homes during the pandemic.” From the outset of the pandemic, Koch Industries began “plowing money into real estate.” The Wall Street Journal reported in March 2021 that Koch “is emerging as a major real-estate investor during the pandemic, using its robust cash reserves to buy properties at beaten-down prices.” The Guardian noted that Koch Industries, “real estate spending spree has coincided with Koch-funded conservative groups mounting lawsuits against the federal eviction ban.”
In this case, PLF’s suit to block student loan forgiveness aligns with Koch’s economic and political interests. Economically, the less money that the government collects from people making under $125,000, the more it may ultimately require from billionaires (like Charles Koch) and profitable corporations (like Koch Industries). Politically, people who attend college tend to be more liberal than the general population. Providing meaningful student loan relief could increase their participation in future elections, potentially damaging the Republican candidates that Koch favors and spends millions to support.
This lawsuit is part of a larger effort in the right-wing universe to stoke resentment among some Americans against other Americans around student loan forgiveness. Because the more time the rest of us spend fighting with one another over our shrinking piece of the economic pie, the less time we can spend concentrating our energies on billionaires and trillionaires who steal from the rest of us so they can have yachts so large the ships have their own helipads and interior spaces to park their smaller yachts within their megayachts.