Grand Canyon Times

The Job Creators Network Foundation (JCNF) initiated a lawsuit against President Joe Biden's administration to stop the student loan forgiveness program. 

Critics of Biden fear that the program, intended to forgive significant amounts of student loans owned to the federal government, will worsen inflation in Arizona and across the U.S.

The Job Creators Network Foundation is a watchdog organization devoted to defending entrepreneurs and employees from harmful public policies, according to a commentary by Real Clear Politics, a political news website.

Elaine Parker, president of JCNF, 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 Arizona as prices for goods and services rise.

Parker spoke about the lawsuit in her commentary for Real Clear Politics. She argued that student debt constitutes a real problem, but bailing out loans fails to address the source of the problem.

"Bailing out student debt bails colleges out of their culpability in this crisis," Parker said. "It does nothing to reverse runaway college tuition, which is the root cause of the student loan problem."

Axios reported that Sen. Mark Kelly (D-AZ) defended Biden's loan forgiveness program and described it as "more targeted" than other loan forgiveness proposals.

"The federal government should not be profiting off of young graduates,” Kelly said in a statement to Axios.

The JCNF lawsuit attempts to block Biden's loan forgiveness program, alleging it is a violation of the processes of the Administrative Procedure Act, according to Just The News. Parker described the program as an "unprecedented executive power grab" and something that "does nothing to address the root cause of unaffordable tuition" in the article. 

The Biden administration on Oct. 15 launched a preliminary student loan forgiveness application, following the announcement in August regarding loan forgiveness.

Some analysts fear that the loan bailout program has the potential to negatively affect small businesses. JCNF found in a recent poll that 75% of small business owners who responded believe that loan forgiveness will not solve the problem of high tuition that it purports to address. A majority of respondents believe that it will worsen rampant inflation.

An analysis was performed by Liberty Street Economics, a publication by the Federal Reserve Bank of New York. It suggested that approximately 40.5% of borrowers with student loans owned by the federal government will have their debt completely forgiven.

Several analysts told FOX Business that Biden's plan is expected to cause an increase in college tuition prices and add to the 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," Brian Riedl, a senior fellow in budget, tax, and economic policy at the Manhattan Institute, said in the article. "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."