Knudsen Files Lawsuit Against Biden’s Illegal Student Debt Relief Plan

HELENA – Montana Attorney General Austin Knudsen, along with ten other attorneys general, filed a lawsuit  against the Biden administration’s unconstitutional student loan forgiveness scheme. The lawsuit is the 40th that Attorney General Knudsen has filed against the Biden administration.

Department of Education is wrongfully interpreting the Higher Education Act and bypassing Congress by writing its own rules that would turn most loans, if not wipe them completely out, into grants from the federal government, where borrowers only pay a fraction of the amount owed. By the department’s own estimates, the “SAVE Plan” would cancel over $100 billion in student debt. The cancellation of the loans would directly impact Montana’s economy through a loss of state tax revenue and jobs, as well as increasing law enforcement costs.

“The authority that Defendants claim now lacks any and all substantive limits and is tantamount to claiming that they can abolish all student debt at any time by rulemaking alone,” the attorneys general wrote in the lawsuit. “As the Defendants scrape ever deeper into the proverbial barrel for legal pretexts to abolish student debts, the illegality of those artifices becomes ever more flagrant.”

Along with a loss in tax revenue for Montanans, the “SAVE Plan” would cause an increase in Montana law enforcement costs as a greater risk for fraud will exist to try and exploit student debt borrowers. It would also impact the state’s ability to recruit and retain employees through the Public Service Loan Forgiveness Program.

In 2022, another election year, President Biden and the Department of Education tried to unilaterally cancel student loans for millions of borrowers through the HEROES Act, but the Supreme Court ruled they didn’t have the authority. Now with a new name, and a different authority, his administration is once again trying to take the same unlawful steps with the “SAVE Plan.”

Attorney General Knudsen joined attorneys general from the following states in the Kansas-led lawsuit: Alabama, Alaska, Idaho, Iowa, Louisiana, Nebraska, South Carolina, Texas, Utah.

Click here to read the lawsuit.