Conservative Groups Target Education Department’s $39B Forgiveness Plan

Two conservative think tanks on Tuesday appealed a federal district court ruling dismissing their lawsuit against the U.S. Department of Education’s decision to forgive more than 804,000 borrowers’ student loans. In July, the Education Department announced it would automatically discharge $39 billion in federal student loans as a result of fixes to the way the agency counted payments toward income-driven repayment plans. Under IDR plans, loans should be forgiven after borrowers make enough qualifying payments, but the agency said that it failed to properly track them due to past administrative failures. The Cato Institute and the Mackinac Center for Public Policy are contending the agency overstepped its authority and only Congress can authorize the spending necessary to pay for debt cancellation.