London Daily

Focus on the big picture.
Friday, Aug 22, 2025

A nonprofit just joined forces with a major student-loan lender in asking a federal court to end the payment pause, saying the relief has limited the 'financial incentive' to work in public service

A nonprofit just joined forces with a major student-loan lender in asking a federal court to end the payment pause, saying the relief has limited the 'financial incentive' to work in public service

The New Civil Liberties Alliance filed a lawsuit to end the current student-loan payment pause and prevent Biden from issuing another extension.
The lawsuits keep on coming to end President Joe Biden's student-debt relief.

On Thursday, the New Civil Liberties Alliance, a nonprofit law firm aimed at protecting constitutional freedoms, filed a lawsuit on behalf of the Mackinac Center, a nonprofit think tank based in Michigan that advocates for limited government. The lawsuit targets Biden's continued extensions of the student-loan payment pause, and it asks the federal court in the Eastern District of Michigan to end the current pause and prevent Biden from issuing a further extension.

After Biden announced up to $20,000 in broad student-debt relief at the end of August, two conservative-backed lawsuits paused the plan's implementation. As a result, Biden extended the student-loan payment pause, with waived interest, through 60 days after June 30, or 60 days after the Supreme Court issues a final decision on the relief's legality, whichever happens first.

But Mackinac Center wrote in its complaint that "only Congress can categorically suspend repayment obligations for all student-loan borrowers nationwide. And only Congress can cancel the accrual of interest on student debt owed to the United States."

"The Department initially claimed a short extension was needed to enable Congress to decide whether to extend the suspension legislatively," the complaint said. "But electorally accountable lawmakers in Congress declined to extend the suspension of payment obligations and interest accrual any further, even as they repeatedly legislated all manner of other forms of Covid-19 relief. So, the Department apparently decided to ignore the law and extended the Payment-and-Interest Pause by administrative fiat."

The key argument the group is making relates to the Public Service Loan Forgiveness (PSLF) program, which is intended to forgive student debt for government and nonprofit workers after ten years of qualifying payments. It wrote in its complaint that as a nonprofit, PSLF offers an incentive for people with student debt to work at the group, but the payment pauses have taken away that incentive.

"If interest continues to accrue, then a borrower's outstanding debt that will be forgiven under PSLF after ten years is greater than if interest does not accrue. The borrower therefore has greater incentive to work for a public-service employer and to have that debt forgiven under PSLF. In other words, the benefit public-service employers receive under PSLF is greater if interest continues to accrue on student debt than if interest does not accrue," the complaint said.

"Conversely, if interest stops accruing, outstanding debt that will be forgiven under PSLF is less than it otherwise would be," it continued. "The financial incentive to work for a public-service employer thus falls commensurately."

The libertarian think tank Cato Institute filed a lawsuit in October challenging Biden's broad debt relief and used a similar argument, saying that the relief would undermine hiring efforts under PSLF. That lawsuit did not progress.

Still, Mackinac Center joins the efforts of SoFi Bank — a student-loan refinancing company — that filed a lawsuit last month to end the payment pause, and at the very least, return borrowers ineligible for Biden's broad debt relief back into repayment. The bank cited revenue loss that is said was directly caused by the continued payment pause extensions.

The Education Department has not yet commented on this lawsuit, but it previously said that SoFi's challenge would put millions of borrowers "at serious risk of financial harm."
Newsletter

Related Articles

0:00
0:00
Close
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
Jellyfish Swarm Triggers Shutdown at Gravelines Nuclear Power Station in Northern France
×