A federal judge in Missouri, Judge Matthew Schelp, issued a temporary hold on President Joe Biden’s student loan cancellation plan, blocking any widespread loan cancellation.
This decision came after U.S. District Court Judge J. Randal Hall in Georgia declined to extend the pause on Biden’s plan, with six Republican-led states, led by Missouri’s attorney general, requesting the injunction to prevent the Education Department from mass canceling student loans.
The big picture: Schelp granted the injunction swiftly, expressing that it was an easy decision in response to the states’ concerns about potential mass loan cancellations.
- Biden’s student loan cancellation plan has faced legal challenges since September when states filed a lawsuit in Georgia, arguing that Biden exceeded his legal authority.
- Hall dismissed Georgia from the case, transferring it to Missouri, where it was deemed to have “clear standing” to challenge the plan.
- While there was a brief moment of optimism that the plan might move forward, Schelp’s injunction decisively halted its progression, ending the hopes of student loan cancellation proponents.
What they’re saying: Missouri Attorney General Andrew Bailey hailed the court’s decision as a win for the American people.
“This is yet another win for the American people,” Bailey said in a statement. “The Court rightfully recognized Joe Biden and Kamala Harris cannot saddle working Americans with Ivy League debt.”
Driving the news: Biden’s plan aimed to provide relief to approximately 30 million borrowers by canceling at least some of their student loan debt, erasing up to $20,000 in interest for those facing escalating balances due to runaway interest rates.
- The plan also intended to assist borrowers who had been repaying their loans for extended periods and those who graduated from programs with high debt-to-income ratios.
- Legal and procedural challenges have surrounded Biden’s efforts to pursue student loan cancellation, including previous Supreme Court rejection of a different legal justification for loan cancellation.
- Republican-led states such as Missouri, Alabama, Arkansas, Florida, North Dakota, and Ohio have joined the lawsuit, arguing that the Education Department was prematurely signaling loan servicers to prepare for cancellation, potentially bypassing the typical 60-day waiting period for new federal rules to take effect.
