Biden student debt relief plan blocked again by different judge
By Nate Raymond and Daniel Wiessner
A U.S. judge on Thursday temporarily blocked President Joe Biden’s administration from moving forward with its latest proposal – still not finalized – to forgive student debt held by millions of Americans, handing a victory to six Republican state attorneys general who challenged it.
St. Louis-based U.S. District Judge Matthew Schelp took the action after another judge on Oct. 2 transferred the litigation from Georgia and removed that state from the case by finding it would not experience any legal harm under the debt relief plan. Schelp is an appointee of Republican former President Donald Trump.
The state attorneys general have accused the U.S. Department of Education of overreaching its authority by proposing a regulation that instead should be addressed through legislation in Congress.
The department proposed it in April after two previous plans were blocked by the courts. It would forgive $73 billion in student loan debt held by an estimated 27.6 million borrowers. The Democratic president as a candidate in 2020 pledged to bring debt relief to millions of Americans who turned to federal student loans to fund their costly higher education.
The lawsuit was originally filed in Georgia, where U.S. District Judge J. Randal Hall in September issued a temporary block on the plan, though that expired on Oct. 3. Hall is the judge who moved the case to Missouri.
Under the proposed regulation, debt relief would be granted to: people who owe more than they first borrowed due to the interest that has accrued; those who have been paying off loans for at least 20 or 25 years, depending on the circumstances; and borrowers who were eligible for forgiveness under prior programs but never applied.
The rule has not yet been finalized, a point the U.S. Justice Department made in arguing there was no final agency action for a judge to review in the first place.
The states argued that the administration was laying the groundwork to immediately cancel loans once the rule became final before any challenger could sue to stop it. They said that upon publication of the regulation, the Education Department would be able to instruct loan servicers to immediately process the debt forgiveness.
The attorneys general said such action would occur in the run-up to the Nov. 5 presidential election pitting Democratic candidate Kamala Harris, who is vice president under Biden, against Republican rival Trump, and that the administration would seek political credit for the policy.
The White House has called the current student loan system broken and has said debt relief is necessary to ensure that borrowers are not financially burdened by their decision to seek higher education.
Republicans counter that Biden’s student loan forgiveness approach amounts to an overreach of authority and an unfair benefit to college-educated borrowers while others receive no such relief.
(Reporting by Daniel Wiessner in Albany, New York and Nate Raymond in Boston, Editing by Will Dunham and Alexia Garamfalvi)