November 28, 2022

KOCH’S NOT IT: Dark money-financed lawsuit blocking Biden’s student debt relief tossed out

KOCH'S NOT IT: Dark money-financed lawsuit blocking Biden's student debt relief tossed out

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Just two days after it was filed, the lawsuit to block President Biden from granting student debt relief to forty-three million Americans has been shot down for lack of standing on Thursday.

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The Koch Brothers-financed Pacific Legal Foundation filed the suit on behalf of their employee, Frank Garrison, who is currently enrolled in the Public Service Loan Forgiveness program (PSLF), asserting that though Garrison would qualify for the $20,000 maximum debt forgiveness as a Pell Grant recipient, as an Indiana resident he “will face immediate tax liability from the state of Indiana because of the automatic cancellation of a portion of his debt.”

District Court Judge Richard L. Young disagreed. In response to the motion for a temporary restraining order and injunctive relief in Garrison v. Department of Education, his honor for the Southern District of Indiana wrote:

Following a change in the student loan debt relief plan at issue (Filing No. 13), the court, in view of the fact the Department of Education exempted Plaintiff from receiving debt relief, finds Plaintiff cannot be irreparably harmed as is required for preliminary relief. Pursuant to the parties’ agreement, the motions for a temporary restraining order (Filing No. 4) and preliminary injunction (Filing No. 5) are DENIED without prejudice.

The Biden Administration has yet to introduce a formal plan and has publicly stated the relief is voluntary, saying on the official White House web page, “Thanks to the American Rescue Plan, this debt relief will not be treated as taxable income for the federal income tax purposes.”

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Besides Indiana, several states have announced plans to tax student debt relief, including Arkansas, California, Minnesota, Mississippi, North Carolina, and Wisconsin. Judge Young did grant PLF’s request on Garrison’s behalf to amend the complaint, giving the plaintiff until October 10 to do so, but cautioning Garrison to consider, “Whether he (and any additional plaintiffs) have standing, particularly, whether their injury is caused by and fairly traceable to the debt relief program or to the Indiana Tax Code,” and:

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Whether the Department of Education has taken sufficient action for the case to be ripe for adjudication. Plaintiff’s allegations speculate about the terms of the program. But as evidenced by the Government’s recent addition of an opt-out provision, the plan is still evolving.

The Public Service Loan Forgiveness program praised by Garrison has been riddled with controversy and inconsistencies, leading to a confusing process leaving millions of student loan borrowers with no real record of payments made.

“Borrowers who have worked at a nonprofit, in the military, or in federal, state, tribal, or local government, receive appropriate credit toward loan forgiveness.”

In addition to canceling $500 billion in collective student loan debt, the Department of Education has a plan to “Forgive loan balances after 10 years of payments, raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, and protect future students and taxpayers by reducing the cost of college and holding schools accountable when they hike up prices.

Funded by notorious dark money operatives and having financial ties to far-right conservative, and anti-Muslim hate groups, the plaintiff’s firm has less than two weeks to come up with a credible position in his challenge to stop tens of millions of Americans from seeing a light at the end of the student debt tunnel—which would surely make the Koch brothers happy.

Follow Ty Ross on Twitter @cooltxchick

Ty Ross

News journalist for Washington Press and Occupy Democrats.

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