The Biden administration’s student loan forgiveness plan faced yet another setback on Thursday, as a Missouri judge issued a temporary block on the relief effort. This latest decision came just one day after a federal judge in Georgia allowed a restraining order against the program to expire, giving borrowers a momentary glimpse of hope.
U.S. District Judge Matthew Schelp, appointed by former President Donald Trump, ruled to place a preliminary injunction on Biden’s relief plan. As a result, the U.S. Department of Education is prohibited from moving forward with student loan forgiveness until Schelp can fully rule on the case. This back-and-forth legal battle has left millions of federal student loan borrowers in limbo.
The lawsuit, brought by seven Republican-led states — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio — claims the Biden administration’s debt cancellation plan is illegal. The group argues that the plan could cause significant harm, particularly to student loan servicer Mohela, or the Missouri Higher Education Loan Authority.
On Wednesday, U.S. District Judge Randal Hall in Georgia ruled that his state lacked the legal standing to challenge the relief plan, transferring the case to Missouri where the plaintiffs argue the greatest impact would be felt. The Biden administration and advocates were hopeful when news broke that the restraining order might lapse, with preparations underway for the Department of Education to begin wiping out millions of Americans’ debt.
However, Judge Schelp halted those efforts, citing concerns that the program could move forward too quickly before the courts had a chance to review its legality. “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 wrote in his decision.
