Judge orders resumption of $147 billion in student loan forgiveness from Biden, temporary blow to Republican states’ lawsuit

A federal judge on Wednesday ordered the last Harris-Biden administration to resume student debt forgiveness, dealing a temporary blow to Republican-led states suing over the “unlawful” move.

U.S. District Judge Randal Hall in Augusta, Ga., ruled that the suit lacks standing in the Peach State, one of seven states involved in the lawsuit, because it would not harm Georgia’s tax revenues as authorities had claimed.

Hall, appointed by former President George W. Bush, lifted a temporary restraining order he issued Sept. 5 on the debt cancellation plan, kicked Georgia out of the lawsuit and transferred the case in Missouri, another co-plaintiff.

The Republican state attorneys general who initially filed the suit asked St. Louis U.S. District Judge Matthew Schelp, appointed by former President Donald Trump, to consider blocking the plan from taking effect refund by Friday.

In an earlier ruling, Hall determined that Missouri could suffer millions of dollars in lost revenue from the Higher Education Loan Authority, a private entity that nevertheless performs a public function in providing students with access to federal loans .

The attorneys general of Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio jointly filed a lawsuit on September 3, alleging that President Biden’s plan and of Education Secretary Miguel Cardona would “illegally” cancel $73 billion “overnight” and an additional $146.9 billion. to 27.6 million student borrowers.

They argued that the administration had tried to implement previous plans – but was blocked by the courts – and was now “trying to do so through cloak and dagger.”

In September, the lawsuit says, Cardona “quietly sent orders to loan servicing companies to begin mass forgiveness of loans,” which “violated a law prohibiting the Secretary of State from implementing rules like this sooner than 60 days after their publication.

Cardona had issued a notice of proposed federal regulations in April, automatically enrolling students “with at least one outstanding student loan held by the federal government” unless they opted out.

Under the plan, student borrowers with debt up to $20,000 or who have been paying it off for more than 20 years would have their balance wiped out — even those whose household income exceeded $240,000.

Some borrowers involved in income-driven repayment plans, such as the Savings on Value Education (SAVE) plan, would also be included.

This program would have cost up to $475 billion but has already been blocked by federal courts.

The Supreme Court upheld those decisions after rejecting Biden’s push to use a 2003 law designed to allow veterans of the Iraq and Afghanistan wars to unilaterally cancel up to $430 billion in debt for 43 million student borrowers last year.

It was the administration’s third attempt to forgive billions in student loans before the 2024 election, delivering on the campaign pledge Biden, 81, made to voters four years ago.

Since then, the Department of Education boasts, it has already erased $169 billion in debt for 4.8 million student borrowers — a record that Biden and Vice President Kamala Harris have touted in swing states before on election day.

Republicans accused Biden, and Harris after replacing him on the ballot, of trying to “buy votes” from young, educated members of the Democratic constituency.

“While we appreciate that the district court recognized that this case has no legal basis to be brought in Georgia, the fact remains that this lawsuit reflects an ongoing effort by Republican elected officials to prevent millions from their own voters to have room to maneuver in their own elections. student loans,” a Department of Education spokesperson said in a statement.

The Missouri attorney general’s office did not immediately respond to a request for comment.