On Thursday, U.S. District Judge J. Randal Hall temporarily blocked President Joe Biden’s administration from moving forward with its latest student debt forgiveness plan. This ruling came just days after seven Republican-led states filed a lawsuit to stop the plan. Judge Hall, based in Augusta, Georgia, stated that the states demonstrated a strong likelihood of proving that the Education Department lacked the authority to cancel student loans under the proposed plan.
“This is especially true given recent rulings across the country striking down similar federal student loan forgiveness plans,” Hall, appointed by Republican former President George W. Bush, noted in his ruling. He issued a temporary restraining order after Republican state attorneys general filed a lawsuit on Tuesday challenging a rule the Education Department proposed in April. The rule aimed to provide full or partial debt relief to certain borrowers, affecting an estimated 27.6 million people according to court filings.
Although the rule has not yet been finalized, state attorneys general argued that the Education Department had instructed federal loan servicers to start canceling loans under the plan as soon as this week, potentially leading to what they described as the unlawful forgiveness of $73 billion in debt.
The states, led by Missouri, argued that the Education Department had no legal authority to implement such widespread debt forgiveness. The Biden administration estimates the plan’s cost at $146.9 billion, while the states claim it would run into the hundreds of billions. Judge Hall emphasized the need to preserve the status quo and issued the order pausing the plan until a scheduled hearing on September 18.
The White House strongly opposed the ruling, calling it “an overreach based on false claims fueled by Republican elected officials.” Republicans argue that the debt forgiveness plan unfairly burdens taxpayers by forcing them to pay for other people’s student loans. “Today is a huge victory for every working American who won’t have to foot the bill for someone else’s Ivy League debt,” said Missouri Attorney General Andrew Bailey.
An Education Department spokesperson said they were reviewing the ruling, noting that the draft rule would not be implemented until finalized. The department remains committed to supporting borrowers and providing relief to those who qualify.
This lawsuit marks another challenge to President Biden’s efforts to fulfill his campaign promise of providing student debt relief. The Biden administration has already approved $169 billion in debt relief for nearly 4.8 million people. However, in June 2023, Republican-led states successfully persuaded the conservative majority in the U.S. Supreme Court to block a $430 billion plan that would have forgiven up to $20,000 in debt per borrower for up to 43 million Americans.
In response to that ruling, the Biden administration launched a new program called the Saving on a Valuable Education (SAVE) plan, designed to reduce monthly payments and expedite loan forgiveness for some borrowers. But Republican-led states succeeded in convincing a federal appeals court to block that plan as well, and the Supreme Court declined to lift the injunction on August 28.
