(FiveNation.com)- Last week, a federal judge in Indiana tossed out a legal challenge from the libertarian group Pacific Legal Foundation against the Biden administration’s student debt bailout after the Biden Education Department altered the plan.
Last Tuesday, the Pacific Legal Foundation brought a lawsuit on behalf of plaintiff Frank Garrison, a public interest attorney and employee of the Foundation. The suit alleged that Garrison “will face immediate tax liability from the state of Indiana because of the automatic cancellation of a portion of his debt” from Biden’s bailout.
According to the suit, Garrison along with “millions of others similarly situated in the six relevant states will receive no additional benefit from the cancellation — just a one-time additional penalty.”
But on Wednesday, the Biden administration made changes to the program, scaling back the student debt bailout over concerns about legal challenges from the student loan industry and new lawsuits brought by Republican state attorneys general.
The Department of Education’s alterations to the unconstitutional debt bailout will no longer allow borrowers who received federal student loans from private financial institutions to qualify for the so-called “debt forgiveness.”
Additionally, the Education Department updated its website last Wednesday, noting that borrowers could opt out of the Biden taxpayer-funded bailout “for any reason,” including concerns about state tax liability – the very grounds on which the Pacific Legal Foundation filed its challenge.
As a result of these changes, on Thursday, US District Court Judge Richard Young denied Pacific Legal Foundation’s motion.
However, Pacific Legal Foundation has vowed to continue its fight against the unconstitutional bailout.
PLF attorney Michael Poon said the Biden administration’s “on-the-fly changes” will not change the fact that the program is “brazenly illegal from top to bottom.” Poon argued that the government has failed to make a “plausible argument that the underlying policy is legal.”
