US Judge Temporarily Blocks New Biden Student Debt Relief Plan, According to Reuters

By Nate Raymond

A U.S. judge has temporarily halted the Biden administration’s recent student debt forgiveness initiative, following a lawsuit filed by seven Republican-led states just days earlier.

U.S. District Judge J. Randal Hall, based in Augusta, Georgia, ruled that the states have demonstrated a likelihood of successfully arguing that the Education Department lacks the authority to cancel student loans as proposed. The judge noted that this concern is particularly pertinent given recent court rulings that have struck down similar federal debt relief plans.

The temporary restraining order was issued after state attorneys general filed a lawsuit regarding a proposed rule by the Education Department that could provide full or partial debt relief to specific borrower categories. This rule, which is still in draft form, is expected to impact approximately 27.6 million borrowers.

State attorneys general highlighted that they had obtained documents revealing that the Education Department had instructed federal loan servicers to begin implementing loan cancellations as soon as this week. They argued that this could lead to the illegal forgiveness of $73 billion in debt almost immediately.

Leading the challenge, Missouri’s officials argued that the Education Department does not possess the authority to enact such debt forgiveness measures. The Biden administration has estimated the proposed policy’s cost at $146.9 billion, while the states contend the total burden could run into hundreds of billions.

Judge Hall explained that he swiftly issued the restraining order to maintain the current situation while a hearing is scheduled for September 18.

The White House expressed strong disagreement with the ruling, labeling it an overreach based on misleading claims from Republican officials. Critics argue that student debt forgiveness is unjust, forcing some taxpayers to pay for the education of others.

Missouri Attorney General Andrew Bailey celebrated the ruling as a significant win for taxpayers who won’t be responsible for covering others’ educational debts.

An Education Department spokesperson stated they were reviewing the ruling, emphasizing that the draft rule would not be implemented until finalized. The spokesperson reaffirmed the department’s commitment to providing support and relief for eligible borrowers.

This legal challenge adds to the ongoing conflicts surrounding the Biden administration’s efforts to deliver on its campaign promise of student debt relief for millions of Americans reliant on federal loans for their education.

To date, the Biden administration has approved $169 billion in debt relief for nearly 4.8 million individuals. Furthermore, Republican-led states successfully persuaded the Supreme Court in June 2023 to block a $430 billion program aimed at canceling up to $20,000 in debt for 43 million Americans.

After the Supreme Court’s decision, the administration sought an alternative approach called the Saving on a Valuable Education (SAVE) plan, intended to reduce monthly payments and expedite loan forgiveness for certain borrowers. Yet, this initiative was also halted by a federal appeals court, with the Supreme Court declining to lift the injunction on August 28.