Peach Tree Times

A watchdog organization devoted to defending entrepreneurs and employees from what they call “unfriendly public policy,” the Job Creators Network Foundation, has initiated a lawsuit against the federal government for the recently-announced student loan forgiveness program.

Elaine Parker, president of the JCNF, submitted a statement on the lawsuit, claiming that student debt constitutes a real problem, but that bailing out loans fails to address the source of the problem.

“Bailing out student debt bails colleges out of their culpability in this crisis. It does nothing to reverse runaway college tuition, which is the root cause of the student loan problem,” Parker told Real Clear Politics.

This comes in an attempt to block President Joe Biden’s loan forgiveness program on the allegations that it is a violation of the processes of the Administrative Procedure Act.  Parker describes the program as an “unprecedented executive power grab” and something that “does nothing to address the root cause of unaffordable tuition.”

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

This comes as Sen. Raphael Warnock (D-GA) has urged President Biden to forgive up to $50,000 per borrower--significantly more than the current program would forgive, The Hill reported in May.

Though the move has gained support from many across the nation, some analysts fear that the loan bailout program has the potential to negatively affect small businesses.  In a recent poll, the Job Creators Network Foundation found that 75% of small business owners polled believe that loan forgiveness will not solve the problem of high tuition that it purports to address, and a majority believe that it will worsen rampant 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. "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."

One analysis, performed by a publication of the Federal Reserve Bank of New York, suggests that around 40.5% of borrowers with student loans owned by the federal government will have their debt completely forgiven.