Judge’s Surprising Move Halts Major Biden Administration Plan

At a Glance

Federal judge issues 14-day restraining order against Biden’s “Plan B” student debt cancellation
Plan aimed to benefit up to 30 million borrowers, potentially erasing up to $20,000 in debt
Seven Republican-led states filed lawsuit, claiming the plan exceeds federal authority
Decision pauses implementation pending a September 18 hearing
White House vows to contest the challenge in court

Judge Halts Biden’s Latest Student Debt Relief Effort

On September 5, a federal judge in Georgia temporarily blocked the Biden administration’s newest plan to cancel federal student loans for up to 30 million borrowers. The 14-day restraining order came in response to a lawsuit filed by a coalition of seven Republican-led states, who argue that the federal government is overstepping its authority in attempting to forgive hundreds of billions of dollars in student loan debt.

This latest initiative, dubbed “Plan B,” was developed after the U.S. Supreme Court struck down an initial effort to cancel up to $400 billion in student loans. The new plan aims to benefit borrowers who owe more than they originally borrowed due to accrued interest, potentially erasing up to $20,000 beyond the principal balance.

Judge Pauses Biden Admin’s Unpublished Plan to Cancel More Student Debt

The plan is expected to bring at least partial debt cancellation for nearly 30 million borrowers.https://t.co/hzjLdDvEMk

— The Epoch Times (@EpochTimes) September 5, 2024

Legal Challenges and State Opposition

The lawsuit, led by Missouri Attorney General Andrew Bailey and supported by attorneys general from Alabama, Arkansas, Florida, Georgia, North Dakota, and Ohio, contends that the Education Department lacks the authority to cancel debt on such a large scale. Judge J. Randal Hall sided with the states, pausing Plan B pending a September 18 hearing.

“This is the third time the Secretary has unlawfully tried to mass cancel hundreds of billions of dollars in loans,” the lawsuit states.

Bailey hailed the decision as a “huge victory” for Americans who have paid off their loans or didn’t attend college, highlighting the ongoing debate over the fairness and economic impact of large-scale student debt forgiveness.

Plan Details and Potential Impact

The Biden administration’s Plan B aimed to provide relief to several categories of borrowers, including those repaying for 20-25 years, those eligible for other forgiveness programs, and those who attended schools that lost federal aid or closed. Additionally, a fifth category of borrowers could potentially receive debt forgiveness based on certain hardships, such as medical debt and expensive child care.

While the policy was not set to take effect until the fall, the states claimed that the Education Department had already instructed federal contractors to start canceling some debts. This assertion played a role in the judge’s decision to issue the temporary restraining order.

White House Response and Future Outlook

The Biden administration has vowed to fight the legal challenge. White House spokesman Angelo Fernández Hernández stated that they would continue to contest the lawsuit in court, emphasizing the administration’s commitment to providing relief to student loan borrowers.

As the September 18 hearing approaches, millions of borrowers are left in limbo, uncertain about the future of their student debt. The outcome of this legal battle will have far-reaching implications for the Biden administration’s broader strategy to address the student loan crisis and could significantly impact the financial futures of millions of Americans.