The legal whiplash continues for millions of student-loan borrowers.
On Thursday, Judge Matthew Schelp of the Eastern District of Missouri, who was appointed by former President Donald Trump, placed a preliminary injunction on President Joe Biden’s plan to cancel student debt under the Higher Education Act of 1965.
This ruling came just hours after it appeared a separate federal court may have granted borrowers a lifeline. After a group of GOP state attorneys general filed a lawsuit in Georgia in September to block the debt relief, a federal judge ruled that Georgia was the improper venue for the lawsuit and transferred the case to Missouri.
Schelp’s ruling comes on the final day of the relief’s temporary restraining order — had Schelp not moved ahead and placed a preliminary injunction on the relief, the restraining order would have expired, and Biden would have been permitted to move forward with implementing the relief.
“Balancing the harm and the injury, merged with the public’s interest, easily leads this Court to the conclusion that preliminary injunctive relief should issue,” Schelp wrote. “The public has an immense interest in its own government following the law.”
The ruling also wrote that a preliminary injunction is necessary, as it will preserve the status quo and prevent the administration from canceling student debt pending a final legal decision.
The Education Department had previously intended to begin canceling student debt in October, and it has yet to post the final rule for the relief.
However, the lawsuit from the GOP attorneys general argued that, according to internal documents they obtained on communications between the department and servicers, the Education Department was preparing to cancel student debt ahead of schedule, which they said violated administrative procedure.
With the latest ruling, Schelp wrote that the Education Department is enjoined from “mass canceling student loans, forgiving any principal or interest, not charging borrowers accrued interest, or further implementing any other actions under the Rule or instructing federal contractors to take such actions.”
This is the latest development in the legal roller coaster millions of student-loan borrowers have been on over the past year. Along with the lawsuits to block Biden’s broader debt relief, his SAVE income-driven repayment plan is also blocked in court pending a final legal decision.
It’s unclear if the administration will pursue other forms of relief for borrowers as the legal process progresses. An Education Department spokesperson told BI in a statement earlier on Thursday that it would continue to fight for the relief in court.
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