Judge allows Biden’s student loan cancellation plan to move forward News Watch Washington, D.C. Mary Siddiqi Evening Edition A lawsuit challenging President Joe Biden’s student loan cancellation plan should be heard in Missouri courts, excluding Georgia from the case and moving forward temporarily after a judge ruled that the plan should be heard in Missouri courts. The plan aims to forgive the debt of millions of borrowers but faces legal opposition in Republican-dominated states. While Missouri currently leads the challenge, Biden’s proposal could move forward as early as Friday, barring further legal hurdles.
Biden’s student loan relief plan making progress: A quick look
- Legal challenge moved: A judge ruled that student loan lawsuits should be handled in Missouri, excluding Georgia from the case.
- Cancel plan advance payment: If there are no new legal hurdles, the Biden administration could complete the plan in the coming days.
- Impact on borrowers: The program aims to cancel the debt of up to 300,000 borrowers, providing relief to long-struggling loan holders.
deep eyes
President Joe Biden’s latest attempt to cancel student loan debt received tentative approval after a federal judge ruled to move legal proceedings from Georgia to Missouri. The decision means Biden’s plan can go ahead — at least for now. The plan has been stalled since September amid legal opposition from several Republican-dominated states.
Seven Republican-led states filed lawsuits challenging Biden’s plan in federal court in Georgia, but on Wednesday, U.S. District Court Judge J. Randal Hall decided to dismiss Georgia’s lawsuit, finding it lacked sufficient legal standing to proceed. Judge Hall also chose not to extend the pause on the scheme, effectively allowing it to proceed. The lawsuit now moves to Missouri, one of the remaining states in the case that has “clear standing” to proceed.
As of Thursday, a coalition of states opposed to the plan, including Missouri, had filed a request in Missouri court to block Biden’s proposal. However, if a Missouri court doesn’t throw up new legal hurdles, the Biden administration could soon finalize rules that would allow the loans to be canceled — possibly as early as Friday. The Department of Education will be able to complete the regulatory process required to cancel the loan program, although it may still take days or weeks to implement.
Biden’s latest proposal aims to provide substantial relief to about 300,000 borrowers. Specifically, it would forgive up to $20,000 in interest for those whose loan balances ballooned due to accumulated interest. It also targets borrowers who have been repaying their loans for 20 or 25 years, and those who are taking college courses that have left them with debt levels higher than their income levels.
Biden’s first attempt to cancel student loans was rejected by the Supreme Court earlier this year. The original plan aimed to cancel loans of up to $430,000 for about 20,000 borrowers. After the court rejected it, Biden directed the Education Department to pursue a different legal route to canceling the loans, this time through the federal rulemaking process. The new plan follows a more structured regulatory process in the hope of overcoming the legal issues that caused the previous attempt to fail.
Judge Hall’s recent ruling underscores that Georgia has not proven that Biden’s revised plan would cause significant harm. Georgia’s argument that the policy could have a negative impact on the state’s income tax revenues was found by the court to be unconvincing. The judge acknowledged, however, that Missouri does qualify because of the possible implications for MOHELA, the student loan servicer associated with the state. MOHELA is tasked by the federal government with administering student loans, and the state of Missouri argued that canceling the loans would harm MOHELA’s revenue because its compensation depends on the number of borrowers it serves.
In ongoing litigation, states challenging the loan cancellations argue that the Biden administration moved forward with the program too quickly. Specifically, they claim the Department of Education directed loan servicers to prepare for loan cancellations as early as September 60, effectively bypassing the 9-day waiting period required for the new federal regulations to take effect. States argue the Biden administration’s actions circumvented due process, and they’re calling on Missouri courts to quickly intervene to prevent widespread loan cancellations.
The legal battle now hinges on the next move in Missouri courts. Republican-dominated states involved in the case – including Missouri, Alabama, Arkansas, Florida, North Dakota and Ohio – are urging the court to act quickly, warning that if the current momentum succeeds, If left unchecked, the Department of Education could “illegally cancel hundreds of billions of dollars in student loans as early as Monday.”
If approved, Biden’s student loan plan would be a major financial relief measure aimed at addressing the educational debt burden of millions of Americans. Specifically, the program aims to eliminate up to $20,000 in accrued interest for borrowers whose balances have increased due to interest, even if they have been making payments. The program also provides relief to borrowers who have been repaying their loans for twenty years or more and those enrolled in college courses that have left them with debt far greater than their potential income.
The original plan, ultimately blocked by the Supreme Court, would have provided relief to 430,000 Americans. Missouri was one of the states that led opposition to Biden’s plan in that case, and it remains at the center of the current litigation. Earlier Supreme Court rulings have significantly narrowed the scope of what actions can be considered legal under presidential authority, forcing the Biden administration to seek a new legal basis for relief through the federal rulemaking process.
As the Biden administration moves forward, the Department of Education is preparing to finalize the necessary rules to pave the way for the cancellation to become a reality. However, the process is complex and may still face additional hurdles. If Missouri’s lockdown request is approved, Biden’s plans could be delayed again or even disrupted entirely. The government is racing against time, given the possibility of further legal challenges and the stakes of the upcoming presidential election.
The latest developments in the legal challenge also have significant political implications. The case comes as the election season heats up as Biden looks to make good on a key campaign promise, student debt relief. For Democrats, the prospect of widespread student loan cancellation is a key issue that resonates with millions of voters, especially young Americans burdened by student loans. Moving forward with the plan provides the Biden administration with a narrative of achievement, especially after a Supreme Court setback earlier this year.
In contrast, the opposition, led by Republicans, believes that Biden’s proposal exceeds executive power and may impose a financial burden on taxpayers. The rapid advance of the loan cancellation program through regulatory channels has also fueled accusations that the government has skirted standard procedures, which may resonate with voters wary of government overreach.
The Missouri court’s decision is critical for borrowers eagerly awaiting relief. Many people are facing increasing stress due to years of compound interest and stagnant wages. The proposed cancellation is intended to address not only the immediate burden of debt, but also systemic issues related to the cost of higher education and the effectiveness of repayment plans.
In the coming days and weeks, all eyes will be on the Missouri court as it weighs arguments from both sides. If the Biden administration succeeds in pushing the plan through, it would mark a major victory for student debt relief advocates and potentially provide meaningful financial relief to millions of Americans. However, given the stakes involved, further legal action is almost certain.
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