The Sconi

The Job Creators Network Foundation (JCNF) has filed suit against the Biden administration, charging the president’s new loan forgiveness program violates the Administrative Procedure Act and amounts to an “unprecedented executive power grab” that “does nothing to address the root cause of unaffordable tuition.”

JustTheNews.com reports the suit seeks to block the program from taking effect.

Earlier this month, the White House formally launched the application process for the program after first making mention of the plan back in August.

With the Federal Reserve Bank of New York pegging the number of borrowers with student loans owned by the federal government that could see them completely erased through the program at over 40%, some analysts worry that the program could also equate to negative consequences for the small businesses industry.

“Bailing out student debt bails colleges out of their culpability in this crisis,” JCNF President Elaine Parker said in a statement. “It does nothing to reverse runaway college tuition, which is the root cause of the student loan problem.” 

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

In a recent poll, Monthly Monitor reports the Job Creators Network Foundation found that three out of every four small business owners polled believe that loan forgiveness will not solve the problem of high tuition that it purports to address, and a majority believes that it will worsen rampant inflation.

In addition, several experts recently told FOX Business they suspect the president’s plan could actually spark even higher tuition prices, adding to the already runaway inflation crisis.

"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," said Brian Riedl, a senior fellow in budget, tax and economic policy at the Manhattan Institute. "This is pretty similar to the fact that historically 60% of all student aid increases have been captured with tuition hikes, and this will be treated like an increase in student aid moving forward, which suggests that 60% will be countered by tuition hikes."

Here in Wisconsin, NerdWallet reports, current legislation requires forgiven student debt to be taxed as income.