A fierce legal battle is underway to block the Joe Biden administration’s new student loan forgiveness measure before it is even formalized. On the 2nd, a federal court in Georgia ruled to lift the injunction against the new student loan forgiveness measure. However, the next day, on the 3rd, a federal court in Missouri issued another injunction against the new student loan forgiveness measure, putting the brakes on the Biden administration’s new student loan forgiveness measure again in one day.
This lawsuit began on the 3rd of last month, when seven Republican-leaning states, including Georgia, Florida, Alabama, Arkansas, Missouri, North Dakota, and Ohio, filed a lawsuit to block the “federal government’s attempt to implement large-scale student loan forgiveness despite its lack of authority.”
Initially, the Georgia federal court issued a temporary injunction on the 5th of last month, but lifted it on the 3rd, about a month later. In addition, the Georgia federal court transferred the lawsuit to the Missouri federal court, saying that the state of Georgia was not qualified to file the lawsuit because it could not clearly prove the damage it would incur.
In response, Judge Matthew Schelf, who was presiding over the trial in the Missouri federal court, accepted the plaintiffs’ request and issued a new injunction. In April, the Biden administration proposed a new student loan forgiveness measure to replace the original student loan forgiveness plan that was blocked by the Supreme Court last year. The new debt forgiveness plan is centered on rescuing borrowers who owe more than the principal amount of their loans due to interest. Up to $20,000 of their debt inflated by unpaid interest will be forgiven, regardless of their income.
In addition, all interest will be forgiven for student loan borrowers who are enrolled in an income-based repayment plan such as SAVE and whose annual income is less than $120,000 for individuals or $240,000 for couples. The Biden administration began preparing for the new debt forgiveness plan in earnest on August 1, sending emails to tens of millions of student loan borrowers to inform them of the new debt forgiveness plan. However, even before the final implementation regulations for the new debt forgiveness plan were finalized, seven conservative states filed a lawsuit to block its implementation, making its future uncertain.
The Biden administration’s efforts to ease the burden of student loan debt have repeatedly been blocked by the courts. President Biden’s first debt forgiveness plan of up to $20,000 was blocked by the Supreme Court in June of last year, and in July, the 8th Circuit Court of Appeals temporarily blocked the Biden administration’s new income-based student loan repayment plan, SAVE, which began last fall.