Keystone Today

The Job Creators Network Foundation’s Legal Action Fund has initiated a lawsuit against the Biden Administration in an effort to stop the loan forgiveness program, which is widely criticized by Republicans as the country struggles with high inflation rates

“Bailing out student debt bails colleges out of their culpability in this crisis,” Elaine Parker, the president of JCF, said in a report she wrote in RealClear Politics. “It does nothing to reverse runaway college tuition, which is the root cause of the student loan problem.” 

On Oct. 15, the Biden Administration launched a preliminary loan forgiveness application, following his August announcement where eligible borrowers could receive up to $20,000 in loan forgiveness, according to the Student Aid website. The JCF is a watchdog organization focused on defending entrepreneurs and employees from public policies deemed unfavorable.

Parker also pointed out the dangers of plugging $426 billion into the economy during a year of record inflation–a year that has been especially hard on Pennsylvania with its soaring prices.

According to Just the News, the lawsuit “seeks to block the program from being implemented on the ground that it violates the Administrative Procedure Act’s notice-and-comment procedures.” Parker said in the report that the lawsuit is to block the student loan bailout, and she also called it an “unprecedented executive power grab.” 

“The administration's action does nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments,” Parker said to Just the News.

Some analysts fear that the loan bailout program could negatively affect small businesses. A recent poll by the Job Creators Network Foundation showed that 75% of small business owners believe loan forgiveness will not solve the problem of high tuition, and also a majority believe it will worsen inflation.

An analysis in a publication of the Federal Reserve Bank of New York showed that about 40.5% of borrowers with student loans owned by the federal government will have their debit forgiven entirely.

Some experts told Fox Business that Biden’s plan could cause an incline in college tuition prices and add to inflation.

"Students will likely feel liberated to borrow more money on the assumption of future loan forgiveness, and universities will take advantage of the additional borrowing by raising tuition,” Brian Riedl, a senior fellow in budget, tax and economic policy at the Manhattan Institute, told Fox Business.

Riedel added that normally 60% of student aid increases have led to tuition hikes.

While Republicans have criticized Biden’s Student Loan Forgiveness Program, it has been applauded by Democrats like Sen. Bob Casey (D-PA). On his website, he said that this is a way to relieve an intolerable financial burden. He also suggested that the bailout is only the first step, and doesn’t address the root problem, which is the increasingly skyrocketing costs of post-secondary education.

“Today, President Biden eased the burden for millions of Americans who are struggling under the weight of their student debt,” Casey wrote on his website. “This will give them the freedom to invest in their future, buy a home, or take a risk and start a business.”