Biden's student loan plan can move forward, judges rule

Last month, a group of seven Republican-led states sued to stop President Joe Biden's new student loan forgiveness plan, which his administration developed after the Supreme Court rejected his original proposal.

On Wednesday, a federal judge appointed by Republican President George W. Bush handed the Biden administration a small victory, allowing a temporary restraining order to expire while the lawsuit is heard. That means the federal government can move forward with the regulation, which would forgive up to $20,000 in debt for more than 30 million people, according to the White House.

The ruling comes just a month before Election Day, and with voters in some states already casting their ballots, Vice President Kamala Harris is running in part on a promise to continue canceling student loan debt.

Judge J. Randal Hall, a federal judge in the Southern District of Georgia, granted the seven states — Alabama, Arkansas, Florida, Georgia, Missouri and Ohio — a preliminary injunction on Sept. 5 but ruled Thursday that the case should go to trial be moved to the Eastern District of Missouri and that Georgia had no standing in the lawsuit. And he let the restraining order expire.

“While we appreciate the district court's admission that this case has no legal basis in Georgia, the fact remains that this lawsuit reflects the ongoing efforts of Republican elected officials to prevent millions of their own voters from voting in their country to breathe.” Student loans,” a spokesperson for the Department of Education said in a statement. “We will continue our lawful efforts to provide relief to more Americans, including by vigorously defending these proposals in court.” We will not stop fighting to fix the broken student loan system and provide support and relief to borrowers across the country .”

The plan, which has not yet been finalized, has been in the works since the Supreme Court rejected Biden's original and sweeping proposal to forgive up to $20,000 in student debt for all Americans under a certain income.

The new and narrower proposal, which Biden unveiled during a trip to Wisconsin in April, would provide at least some level of loan forgiveness to more than 30 million people. It focuses on specific categories of borrowers: those who, because of interest, now owe more on their student loans than when they began repayment; certain borrowers who have been in repayment for more than 20 or 25 years; those who would be entitled to forgiveness based on actions already taken but not requested; and those enrolled in programs with little financial value, such as an institution that has not met the department's accountability standards.

The plan was expected to be finalized this fall, and the administration began sending emails to people who may be eligible for relief earlier this summer.

Implementing the plan before the rule went into effect was illegal, the Republican states argued in their lawsuit last month.

The liberal think tank Center for American Progress estimated that Biden's plan could relieve the debt of three out of four borrowers.

Persis Yu, deputy executive director and executive director of the nonprofit Student Borrower Protection Center, warned Thursday: “This case is far from over.” The case is Missouri Attorney General Andrew Bailey's third attempt to stop Biden's student loan relief plans said Yu.

Bailey did not immediately respond to a request for comment, but said last month when the injunction was issued that “today is a major victory for every working American who will not have to foot the bill for others' Ivy League debts.”

“Today’s court decision is a small victory for democracy. “This Missouri AG case is as absurd as it is dangerous,” Yu said in a statement. “The Biden-Harris Administration’s Plan B is both legal and necessary to provide vital relief to over 30 million Americans trapped in a vicious cycle of unaffordable debt.”

Spectrum News' Maddie Gannon contributed to this report.