Judge has blocked Biden’s Student Loan Forgiveness Plan and borrowers are uncertain of what’s going to happen!
On September 5th, U.S. District Judge Randal Hall from Augusta, Georgia, blocked Biden’s Student Loan Forgiveness Plan by issueing a temporary restraining order against it. This came after an earlier attempt to cancel student debt for millions of Americans, in 2022, which also faced legal challenges.
The lawsuit that prompted the block was filed by seven Republican-led states – Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio – claiming that the U.S. Department of Education was exceeding its authority by attempting another round of debt cancellation.
The new forgiveness plan, potentially impacting more than 25 million Americans, wasn’t expected to be finalized until October. Yet, the state attorneys general claimed, on the lawsuit, they found evidence that federal loan servicers had been instructed to start canceling debts as early as September 3rd. However, legal experts doubt that the administration would break the rules of the regulatory process timeline, with many suggesting the servicers were simply preparing for eventual debt cancellation once the rule is complete.
Judge Hall ruled that the states presented a strong case, stopping the administration from moving forward with its debt forgiveness plan until at least a September 18th hearing. According to Luke Herrine, an assistant professor of Law at the University of Alabama, the ruling only imposes a temporary block, and the exact implications of the order remain unclear. Herrine noted that the administration can continue the rule-making process and prepare for debt forgiveness. However, experts say that actual debt relief might be delayed for months, depending on the courts’ decisions.
Borrowers in a State of Uncertainty
For now, the fate of Biden’s large-scale student loan forgiveness plan is in limbo and many borrowers are in a state of uncertainty. Additionally, his new SAVE repayment plan, which offers borrowers more affordable repayment options, is also facing legal challenges, but those enrolled in the SAVE plan won’t need to make payments for the time being.
With these legal hurdles, Biden’s efforts to provide student debt relief before the 2024 presidential election are stalled. Some experts suggest that this delay is part of the GOP’s strategy to block popular initiatives from moving forward, especially ones like student debt cancellation that have strong public support.