Judge Blocks Biden’s Latest Student Debt Relief Plan

A federal judge in Georgia has temporarily blocked President Biden’s latest attempt to cancel billions in student debt, dealing a blow to the administration’s efforts to provide relief to millions of borrowers.

At a Glance

Judge J. Randal Hall issued a 14-day restraining order on Biden’s “Plan B” student debt relief plan
The plan aimed to cancel debt for up to 30 million borrowers, including those with ballooning interest
Seven Republican-led states sued, claiming the administration lacks authority for mass debt cancellation
The decision pauses the plan pending a hearing on September 18
This is the latest setback for Biden’s attempts to address the student debt crisis

Legal Challenge Halts Biden’s Debt Relief Efforts

On September 5, a federal judge in Georgia temporarily blocked the Biden administration’s latest plan to cancel federal student loans for up to 30 million borrowers. The 14-day restraining order was issued in response to a lawsuit filed by a coalition of seven Republican-led states, who argue that the federal government is overstepping its authority.

The plan, dubbed “Plan B,” was developed after the U.S. Supreme Court struck down an initial effort to cancel up to $400 billion in student loans. This new initiative aimed to benefit borrowers who owe more than they originally borrowed due to accrued interest, potentially erasing up to $20,000 beyond the principal balance.

Judge Pauses Biden Admin’s Unpublished Plan to Cancel More Student Debt

The plan is expected to bring at least partial debt cancellation for nearly 30 million borrowers.https://t.co/hzjLdDvEMk

— The Epoch Times (@EpochTimes) September 5, 2024

Details of the Blocked Plan

The Biden administration’s “Plan B” targeted several groups of borrowers for debt relief. These included those repaying loans for 20-25 years, individuals eligible for other forgiveness programs, and students who attended schools that lost federal aid or closed. Additionally, a fifth category could have received debt forgiveness based on specific hardships, such as medical debt and expensive child care.

“This is the third time the Secretary has unlawfully tried to mass cancel hundreds of billions of dollars in loans” their complaint read.

The coalition of states, led by Missouri Attorney General Andrew Bailey, contends that the Education Department lacks the legal authority to cancel debt on such a large scale. Judge J. Randal Hall sided with the states, pausing the plan pending a September 18 hearing.

Impact on Borrowers and Political Implications

This legal setback leaves millions of borrowers in limbo, unsure about the fate of their student debt. The Biden administration had positioned student debt relief as a key policy initiative, particularly appealing to younger voters and those burdened by education costs.

“Plaintiffs show a substantial likelihood of success on the merits given the rule’s lack of statutory authority” the judge wrote.

Critics of the plan, including Bailey, have hailed the decision as a “huge victory” for Americans who have paid off their loans or didn’t attend college. The lawsuit, supported by attorneys general from Alabama, Arkansas, Florida, Georgia, North Dakota, and Ohio, accuses the Education Department of finalizing the rule in a way that avoids judicial review and potentially benefits the Democratic presidential candidate before the upcoming election.

Two federal judges separately ordered a temporary halt to parts of a flagship Biden administration program to reduce student debt payments and speed up loan forgiveness for some borrowers. https://t.co/tDu8EWqX9r

— Bloomberg Law (@BLaw) June 29, 2024

Looking Ahead

As the legal battle continues, the White House has vowed to contest the challenge in court. The upcoming hearing on September 18 will be crucial in determining the fate of Biden’s student debt relief efforts. For now, millions of borrowers who were hoping for relief must wait as the judicial process unfolds, highlighting the complex and contentious nature of addressing the nation’s student debt crisis through executive action.