Judge blocks Biden’s new student debt forgiveness plan, in another setback
A federal judge extended a temporary restraining order on Pres. Biden’s newest student debt forgiveness plan that could potentially affect 25 million borrowers - and have impact on the upcoming presidential election.
Student loan forgiveness has been a key campaign promise but has been stymied by legal challenges over the last several months. This latest student loan forgiveness effort, which would not require an application, could forgive up to $147 billion in student debt for upwards of 25 million Americans.
On Thursday, Federal judge Randal Hall ruled that “good cause exists” to extend his Sept. 5 restraining order that blocked the Department of Education’s student loan cancellation effort, after seven GOP-led states sued Pres. Biden and Education Secretary Miguel Cardona, arguing that the debt forgiveness plan would “unlawfully” cancel federal student loans “overnight.”
“President Biden does not have the authority to erase student debt without express congressional approval,” said a spokesperson for Missouri Attorney General Andrew Bailey, who along with attorneys general from Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio sued Pres. Biden and Education Secretary Miguel Cardona.
The states argued that the plan, which the administration had wanted to start implementing this fall ahead of the presidential election, is illegal.
Related: Supreme Court says no to un-blocking Biden’s SAVE student loan forgiveness plan
Over the summer, the Biden administration emailed millions of student loan borrowers, alerting them that the debt forgiveness was on the way and that they needed to let their servicer know by Aug. 30 if they wanted to opt out of the forgiveness program.
The program would have automatically forgiven some or all student loan balances for borrowers who:
- owe more than they originally borrowed
- have been paying back loans for at least 20 years
- would have qualified for loan forgiveness but didn’t apply
- are enrolled in low-financial-value programs
Meanwhile, in July, the GOP-led states appealed to the Supreme Court, asking the high court to “step in again” to block President Biden’s Saving on a Valuable Education (SAVE) plan, citing the administration’s Supreme Court defeat in 2023. On August 19, Pres. Biden asked the Supreme Court to reinstate the SAVE plan in an emergency appeal, however, in late August, the court refused to un-block the plan.
An appeals court hearing is set for October 24, however, the SAVE case is likely to be escalated to the Supreme Court.