30M student-loan borrowers face setback as judge blocks Biden's plan

A federal judge appointed by Trump has blocked President Biden's initiative for broader student loan debt cancellation, affecting 30 million borrowers. This ruling creates uncertainty for many who were hoping for relief from their student loans. The decision underscores the ongoing legal battles surrounding student debt relief in the United States and raises questions about the future of loan forgiveness policies.

On Thursday, Judge Matthew Schelp from the Eastern District of Missouri, appointed by former President Donald Trump, issued a preliminary injunction against President Joe Biden's plan to cancel student debt under the Higher Education Act of 1965.

This decision came just hours after a different federal court seemed to offer hope to borrowers. In September, a group of GOP state attorneys general filed a lawsuit in Georgia to halt the debt relief, but a federal judge ruled that Georgia was not the correct venue for the case and transferred it to Missouri.

Schelp's ruling was made on the last day of the relief's temporary restraining order. Had he not issued a preliminary injunction, the restraining order would have lapsed, allowing Biden to proceed with the debt relief implementation.

In his ruling, Schelp stated, “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.” He emphasized the public's significant interest in ensuring that the government adheres to the law.

He also noted that a preliminary injunction is essential to maintain the current situation and prevent the administration from canceling student debt until a final legal determination is made.

The Education Department had plans to start canceling student debt in October but has not yet issued the final rule for the relief.

However, the GOP attorneys general's lawsuit claimed that internal documents indicated the Education Department was preparing to cancel student debt prematurely, which they argued was a violation of administrative procedures.

In his latest ruling, Schelp stated that the Education Department is prohibited 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 development is the latest chapter in the tumultuous legal journey faced by millions of student-loan borrowers over the past year. In addition to the lawsuits aimed at blocking Biden's broader debt relief, his SAVE income-driven repayment plan is also stalled in court pending a final legal outcome.

It remains uncertain whether the administration will explore alternative forms of relief for borrowers as the legal process unfolds. An Education Department spokesperson stated earlier on Thursday that the department would continue to advocate for the relief in court.

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Source: MSN‍