U.S. President Joe Biden spoke about new efforts to cancel student debt and support borrowers at the White House on October 4, 2023.
The Biden administration’s broad student loan forgiveness initiative has faced another setback, as a Missouri judge issued a temporary block on Thursday. This ruling came just a day after a federal judge in Georgia decided to let a restraining order against the relief plan expire.
U.S. District Judge Matthew Schelp, appointed by former Republican President Donald Trump, issued the latest preliminary injunction against Biden’s relief strategy. Consequently, the U.S. Department of Education is once again prohibited from forgiving student loans until Judge Schelp rules on the case.
This injunction marked a turbulent 24-hour period for federal student loan borrowers as the legal battle over Biden’s aid package, initiated by seven GOP-led states, shifted from Georgia to Missouri courts. The states involved in the lawsuit — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio — claim that the new debt cancellation effort by the U.S. Department of Education is unlawful.
On Wednesday, U.S. District Judge Randal Hall in Georgia determined that his state did not have the standing to challenge the relief plan, meaning his court was not the appropriate venue for the case. He subsequently directed the case to be moved to Missouri, as the states argue that Biden’s plan would significantly impact the Missouri Higher Education Loan Authority, known as Mohela.
Consumer advocates and borrowers had hoped for quick action on the loan forgiveness plan after CNBC reported on Thursday that the restraining order would lapse. The Education Department had already instructed its loan servicers to begin the process of reducing and eliminating debts for millions of Americans.
However, Schelp noted that this possibility was precisely why he decided to delay any action while he evaluates the case. “Allowing Defendants to eliminate the student loan debt at issue here would prevent this Court, the U.S. Court of Appeals, and the Supreme Court from reviewing this matter on the backend, allowing Defendants’ actions to evade review,” Schelp explained.
This story is still developing, so please check back for updates.