Recently released emails obtained by the Student Borrower Protection Center reveal that employees of a Missouri student loan service provider have expressed confusion that the state attorney general is placing the provider at the center of a lawsuit filed to block Joe Biden’s student loan forgiveness plan.
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The U.S. Supreme Court is expected to rule on a legal challenge to the president’s student debt forgiveness of up to $20,000 in the coming weeks. That challenge — filed by the Missouri attorney general and five other Republican-run states — and another challenge filed by the conservative advocacy organization, Job Creators Network, have gone to the Supreme Court.
The Missouri Higher Education Loan Authority — or Mohela — is at the center of the challenge from GOP-led states, saying the loan service provider would lose revenue and suffer negative impacts on its financial obligations to Missouri. Consumer advocates, meanwhile, have pointed out that Mohela should derive revenue from Biden’s cancellation plan.
In challenge hearings earlier this year, U.S. Supreme Court justices asked why Mohela did not bring his own legal challenges to Biden’s debt cancellation plan and how states led by Republicans could claim damages on their behalf.
Emails since released establish that Mohela employees expressed similar confusion.
“THE [Missouri] State AG needed to claim that our borrowers had been wronged for their quality, so they make us look bad by filing this not only with [Missouri] on it, but mostly bad because they dropped it in [Missouri]“wrote a Mohela employee in September 2022.
Another Mohela employee asked in an October 2022 email, “Just out of curiosity, is MOHELA out of the ongoing lawsuit to prevent loan cancellation? Are we the bad guys?
A colleague replied, “Mohela is technically not part of this lawsuit, the Missouri AG is suing on their behalf. However, it’s all about [Family Federal Education Loans] stuff, and since they changed the rules, this lawsuit should be ruled as having no standing.
Ella Azoulay, a research and policy analyst with the Student Borrower Protection Center, argued that the emails confirmed “partisan hacking work” in the Missouri lawsuit to block student debt relief.
Legal challenges put Biden’s student debt relief plan announced in August 2022 on hold. The relief plan would provide up to $20,000 in student debt relief to Pell grant recipients and up to 10 $000 student debt forgiveness for all other borrowers with annual income below $125,000. Nearly 26 million Americans had applied for relief under the plan as of November 2022.