A federal judge has allowed a temporary restraining order on the Biden administration’s new student debt relief plan to expire, clearing the way for the program to resume alleviating the debt incurred by more than 25 million Americans.
Issued late Wednesday, the decision by U.S. District Judge Randal Hall, a Bush appointee, stems from a lawsuit filed early last month by a coalition of Republican-led states—Missouri, Georgia, Alabama, Arkansas, Florida, North Dakota and Ohio—to block the Biden administration’s program.
Hall dismissed Georgia from the lawsuit, saying the state had failed to show that the plan had caused it sufficient financial harm that was “concrete, particularized, actual, or imminent.”
Stripped of its standing as a plaintiff, Georgia was no longer the proper venue for the case to play out, Hall wrote. He argued that the “most equitable result” would be to transfer the case to a court in Missouri, where the state’s attorney general has said that the plan would harm the earnings of the quasi-state loan servicer Mohela, or the Missouri Higher Education Loan Authority.
More broadly, the plaintiffs claim that the Biden administration is exceeding its authority with an illegal scheme that will deprive states of tax revenue. Hall at least nominally agreed with that argument last month, when he extended the restraining order for an additional 14 days.
The Department of Education would not comment on the specifics of the case, but a spokesperson told The Washington Post that the lawsuit “reflects an ongoing effort by Republican elected officials who want to prevent millions of their own constituents from getting breathing room on their student loans.”
The plan, which could be finalized and implemented as early as this fall, is a new version of a grander Biden program struck down by the U.S. Supreme Court last year. The original plan would have allowed the federal government to forgive up to $20,000 in student loans for more than 40 million borrowers.
Announced in April, the new plan “would fully eliminate accrued interest for 23 million borrowers, would cancel the full amount of student debt for over 4 million borrowers, and provide more than 10 million borrowers with at least $5,000 in debt relief or more,” the White House said at the time.
It targets four groups of borrowers: those who owe more than they originally took out because of interest; those who have been in repayment for at least two decades; those who attended programs that have led to low earnings; and those who are eligible for other existing forgiveness programs but never applied.
The plan is set to cost $147 billion over a decade, according to the Biden administration’s estimates.
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