Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 29, 2024

A nonprofit just joined forces with a major student-loan lender in asking a federal court to end the payment pause, saying the relief has limited the 'financial incentive' to work in public service

A nonprofit just joined forces with a major student-loan lender in asking a federal court to end the payment pause, saying the relief has limited the 'financial incentive' to work in public service

The New Civil Liberties Alliance filed a lawsuit to end the current student-loan payment pause and prevent Biden from issuing another extension.
The lawsuits keep on coming to end President Joe Biden's student-debt relief.

On Thursday, the New Civil Liberties Alliance, a nonprofit law firm aimed at protecting constitutional freedoms, filed a lawsuit on behalf of the Mackinac Center, a nonprofit think tank based in Michigan that advocates for limited government. The lawsuit targets Biden's continued extensions of the student-loan payment pause, and it asks the federal court in the Eastern District of Michigan to end the current pause and prevent Biden from issuing a further extension.

After Biden announced up to $20,000 in broad student-debt relief at the end of August, two conservative-backed lawsuits paused the plan's implementation. As a result, Biden extended the student-loan payment pause, with waived interest, through 60 days after June 30, or 60 days after the Supreme Court issues a final decision on the relief's legality, whichever happens first.

But Mackinac Center wrote in its complaint that "only Congress can categorically suspend repayment obligations for all student-loan borrowers nationwide. And only Congress can cancel the accrual of interest on student debt owed to the United States."

"The Department initially claimed a short extension was needed to enable Congress to decide whether to extend the suspension legislatively," the complaint said. "But electorally accountable lawmakers in Congress declined to extend the suspension of payment obligations and interest accrual any further, even as they repeatedly legislated all manner of other forms of Covid-19 relief. So, the Department apparently decided to ignore the law and extended the Payment-and-Interest Pause by administrative fiat."

The key argument the group is making relates to the Public Service Loan Forgiveness (PSLF) program, which is intended to forgive student debt for government and nonprofit workers after ten years of qualifying payments. It wrote in its complaint that as a nonprofit, PSLF offers an incentive for people with student debt to work at the group, but the payment pauses have taken away that incentive.

"If interest continues to accrue, then a borrower's outstanding debt that will be forgiven under PSLF after ten years is greater than if interest does not accrue. The borrower therefore has greater incentive to work for a public-service employer and to have that debt forgiven under PSLF. In other words, the benefit public-service employers receive under PSLF is greater if interest continues to accrue on student debt than if interest does not accrue," the complaint said.

"Conversely, if interest stops accruing, outstanding debt that will be forgiven under PSLF is less than it otherwise would be," it continued. "The financial incentive to work for a public-service employer thus falls commensurately."

The libertarian think tank Cato Institute filed a lawsuit in October challenging Biden's broad debt relief and used a similar argument, saying that the relief would undermine hiring efforts under PSLF. That lawsuit did not progress.

Still, Mackinac Center joins the efforts of SoFi Bank — a student-loan refinancing company — that filed a lawsuit last month to end the payment pause, and at the very least, return borrowers ineligible for Biden's broad debt relief back into repayment. The bank cited revenue loss that is said was directly caused by the continued payment pause extensions.

The Education Department has not yet commented on this lawsuit, but it previously said that SoFi's challenge would put millions of borrowers "at serious risk of financial harm."
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×