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Oct. 6, 2024 |  By: Shauneen Miranda - Missouri Independent

Biden’s student loan relief plan suffers another setback in Missouri ruling

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By Shauneen Miranda - Missouri Independent

The Biden administration was hit with the latest blow to its student debt relief efforts on Thursday after a federal judge in Missouri temporarily blocked the administration from putting in place a plan that would provide student debt relief to millions of borrowers.

The ruling further hinders the administration’s efforts to promote its work on student loans ahead of the November election and comes amid persistent Republican challenges to President Joe Biden’s student debt relief initiatives.

The administration, which unveiled the plans in April, said these efforts would provide student debt relief to more than 30 million borrowers. The proposals were never finalized.

In a September lawsuit, Missouri led Alabama, Arkansas, Florida, Georgia, North Dakota and Ohio in challenging the administration over the plan.

Their suit, filed in a Georgia federal court, came just days after a separate student debt relief effort — the Saving on a Valuable Education, or SAVE, plan — continued to be put on pause after the U.S. Supreme Court declined to lift a block on the plan in late August.

Following the September filing of the suit, U.S. District Judge J. Randal Hall of Georgia paused the plan through a temporary restraining order on Sept. 5 and extended that order on Sept. 19 while the case could be reviewed.

But on Wednesday, Hall let that order expire, dismissed Georgia from the suit and moved the case to a Missouri federal court.

Once the suit moved to Missouri and the restraining order was not extended, the remaining six states in the case quickly sought a preliminary injunction.

U.S. District Judge Matthew T. Schelp granted the states’ request on Thursday, writing that the administration is barred from “mass canceling student loans, forgiving any principal or interest, not charging borrowers accrued interest, or further implementing any other actions under the (debt relief plans) or instructing federal contractors to take such actions.”

Missouri Attorney General Andrew Bailey praised Schelp’s decision, saying in a Thursday post on X that it’s a “huge win for transparency, the rule of law, and for every American who won’t have to foot the bill for someone else’s Ivy League debt.”

Meanwhile, a spokesperson for the Department of Education said the agency is “extremely disappointed by this ruling on our proposed debt relief rules, which have not yet even been finalized,” per a statement.

“This lawsuit was brought by Republican elected officials who made clear they will stop at nothing to prevent millions of their own constituents from getting breathing room on their student loans,” the spokesperson said.

The department will “continue to vigorously defend these proposals in court” and “will not stop fighting to fix the broken student loan system and provide support and relief to borrowers across the country,” they added.

The Student Borrower Protection Center, an advocacy group, also lambasted the Missouri decision.

“With this case, the Missouri Attorney General continues to put naked political interest and corporate greed ahead of student loan borrowers in Missouri and across the country,” Persis Yu, deputy executive director and managing counsel for the advocacy group, said in a Thursday statement.

“This is a shameful attack on tens of millions of student loan borrowers and our judicial system as a whole,” Yu said. “We will not stop fighting to expose these abuses and ensure borrowers get the relief they deserve.”