Judge says Biden administration can move forward with student loan forgiveness

A federal judge has allowed a temporary restraining order on the Biden administration’s new student debt relief plan to expire, clearing the way for the program to resume relieving the debt of more than 25 million Americans.

The decision, issued late Wednesday by U.S. District Judge Randal Hall, a Bush appointee, follows a lawsuit filed early last month by a coalition of Republican-led states – Missouri, Georgia, Alabama, Arkansas, Florida, North Dakota and Ohio – was filed to block the Biden administration’s program.

Hall dismissed Georgia from the lawsuit, saying the state had not shown that the plan had caused it sufficient financial harm that was “specific, specific, actual or imminent.”

Without his status as plaintiff, Georgia is no longer the appropriate venue to hear the case, Hall wrote. He argued that the “fairest outcome” would be to move the case to a court in Missouri, where the attorney general has said the plan would harm the revenues of the quasi-governmental loan servicer Mohela, i.e. the Missouri Higher Education Loan agency .

More broadly, the plaintiffs allege that the Biden administration is exceeding its authority with an illegal plan that deprives states of tax revenue. Hall at least nominally agreed with that argument last month when he extended the injunction for another 14 days.

The Education Ministry declined to comment on the details of the case, but a spokesman said it did The Washington Post that the lawsuit “reflects a sustained effort by Republican elected officials to prevent millions of their own constituents from getting relief from their student loans.”

The plan, which could be finalized and implemented as early as the fall, is a new version of a broader Biden program that was rejected by the U.S. Supreme Court last year. The original plan would have allowed the federal government to forgive up to $20,000 in student loans for more than 40 million borrowers.

The new plan, announced in April, would “completely eliminate accrued interest for 23 million borrowers, cancel the full amount of student debt for over 4 million borrowers, and provide debt forgiveness of at least $5,000 or more to more than 10 million borrowers.” the White House said at the time.

It is aimed at four groups of borrowers: those who owe more than they originally borrowed for interest reasons; those who have been in repayment for at least two decades; those who participated in programs that resulted in low income; and those who are eligible for other existing forgiveness programs but never applied.

The Biden administration estimates the plan will cost $147 billion over a decade.