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Small business advocates seek to block Biden’s student debt relief plan with lawsuit

Legal correspondent Alexis Keenan joins Yahoo Finance Live to break down how small business advocacy groups are trying to block the Biden administration’s student loan forgiveness plan.

Video Transcript

SEANA SMITH: All right, well, a small advocacy group, the Job Creators Network Foundation filing a new lawsuit aimed at halting President Biden’s student debt program, the latest in a series of similar suits that we have seen in recent weeks. Yahoo Finance’s Alexis Keenan joins us now with the details on that. Hey, Alexis.

ALEXIS KEENAN: Hi, Seana. To Ronda’s point about doing this early, pay attention because this lawsuit and the others like it could have some bearing on whether or not people actually get their hands on this money that they may be eligible for. So this particular case coming from Job Creators Network. It is an advocacy group for small business, but it’s got two named plaintiffs in the lawsuit. One of these plaintiffs is eligible for the– or partially eligible for the forgiveness, the other one not eligible at all.

So this is filed in the federal district court for the Northern District of Texas. And they’re saying that at the heart of the case, that this executive order coming from President Biden to offer this forgiveness, that it violates the American Procedures Act. Now, that act requires notice and comment periods for certain rule makings, but whether it applies to executive orders, that has, perhaps, not been challenged in this type of case.

Now, the plaintiffs say that the forgiveness eligibility is arbitrary. They say it’s unequal, that the measures adopted by the administration and where to draw those lines about AGI, Adjusted Gross Income, and other factors that determine whether you’re eligible, they say that those are just unequal and arbitrary.

Also, these plaintiffs say that the universities should really be the ones that are held accountable for prices being so high and for students being in the position that they’re in today. They also say that the order is really just a ploy to drum up support for November elections.

But look, there is a stay that these plaintiffs are requesting. So what that means is they want this forgiveness to be put on hold while their lawsuit is pending. And that could be a problem because if a court grants that, then that would perhaps bring to a halt the government dishing out this money to the eligible recipients. So, as Ronda said, those single filers will be allowed to apply when this application comes out, up to $125,000, married and head of household filers up to $250,000. Guys.

SEANA SMITH: Certainly an important story to continue to watch there. Alexis Keenan, thanks so much.

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