The Biden administration was dealt the latest blow to student debt relief efforts Thursday after a federal judge in Missouri temporarily blocked the administration from enacting a plan that would provide student debt forgiveness to millions of borrowers.
The ruling further hampers the administration’s efforts to promote work on student loans ahead of the November election and comes amid continued GOP opposition to Biden’s student debt relief initiatives.
The administration, which unveiled plans in April, said these efforts would provide student debt relief to more than 30 million borrowers. The proposals were never finalized.
In a September lawsuit, Missouri led the states of Alabama, Arkansas, Florida, Georgia, North Dakota and Ohio in challenging administration over the plan.
Their lawsuit, filed in a federal court in Georgia, was filed just days after: a separate action on reducing student debt — The Savings for Valuable Education (SAVE) plan continued to be on hold after the U.S. Supreme Court refused to lift a block on the plan in delayed August.
After the lawsuit was filed in September, U.S. District Judge J. Randal Hall of Georgia halted the plan due to: fleeting restraining order September 5 and extended this order September 19, pending reconsideration of the case.
But on Wednesday, Hall let this order expiredismissed Georgia from the lawsuit and remanded the case to a Missouri federal court.
When the lawsuit was moved to Missouri and the restraining order was not extended, the other six states in the case quickly moved for a judgment preliminary injunction.
United States District Judge Matthew T. Schelp agreed to the states’ request on Thursday, writing that the administration is prohibited from “mass student loan cancellations, forgiving principal or interest, not charging accrued interest to borrowers, or continuing to implement any other actions under (debt reduction plans) or directing federal contractors to take such actions.” “
On Thursday, Missouri Attorney General Andrew Bailey praised Schelp’s decision write to X that it is “a huge win for transparency, the rule of law, and for every American who won’t have to foot the bill for someone else’s Ivy League debt.”
Meanwhile, a Department of Education spokesman said the agency was “extremely disappointed in the ruling on our proposed debt relief rules, which have not even been finalized yet,” the statement said.
“This lawsuit was brought by Republican elected officials who have made it clear that they will stop at nothing to prevent millions of their constituents from profiting off their student loans,” the spokesperson said.
The department will “continue to vigorously defend these proposals in court” and “will not stop fighting to fix the broken student loan system and provide support and relief to borrowers across the country,” they added.
The advocacy group Student Borrower Protection Center also sharply criticized Missouri’s decision.
“In this case, the Missouri Attorney General continues to put naked political interests and corporate greed over student loan borrowers in Missouri and across the country,” said Persis Yu, deputy executive director and managing counsel of the advocacy group. Thursday’s statement.
“This is a shameful attack on tens of millions of student loan borrowers and on our entire judicial system,” Yu said. “We will not stop fighting to expose these abuses and provide borrowers with the relief they deserve.”
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