Please ensure Javascript is enabled for purposes of website accessibility
Biden's Student Loan Cancellation Is Put on Hold Again After Day of Legal Whiplash
gvw_ap_news
By Associated Press
Published 5 months ago on
October 3, 2024

Federal judge in Missouri halts Biden's student loan cancellation plan, dashing hopes after another judge allowed pause to expire. (AP File)

Share

Getting your Trinity Audio player ready...

WASHINGTON — A federal judge in Missouri put a temporary hold on President Joe Biden’s latest student loan cancellation plan on Thursday, slamming the door on hope it would move forward after another judge allowed a pause to expire.

Just as it briefly appeared the Biden administration would have a window to push its plan forward, U.S. District Judge Matthew Schelp in Missouri granted an injunction blocking any widespread cancellation.

Six Republican-led states requested the injunction hours earlier, after a federal judge in Georgia decided not to extend a separate order blocking the plan.

The states, led by Missouri’s attorney general, asked Schelp to act fast, saying the Education Department could “unlawfully mass cancel up to hundreds of billions of dollars in student loans as soon as Monday.” Schelp called it an easy decision.

Biden’s plan has been on hold since September, when the states filed a lawsuit in Georgia arguing Biden had overstepped his legal authority. But on Thursday, U.S. District Court Judge J. Randal Hall decided not to extend the pause after finding that Georgia doesn’t have the legal right to sue in this case.

Hall dismissed Georgia from the case and transferred it to Missouri, which Hall said has “clear standing” to challenge Biden’s plan.

Proponents of student loan cancellation briefly had a glimmer of hope the plan would move forward — Hall’s order was set to expire after Thursday, allowing the Education Department to finalize the rule. But Schelp’s order put the question to rest.

“This is yet another win for the American people,” Missouri Attorney General Andrew Bailey said in a statement. “The Court rightfully recognized Joe Biden and Kamala Harris cannot saddle working Americans with Ivy League debt.”

Biden’s plan would cancel at least some student loan debt for an estimated 30 million borrowers.

It would erase up to $20,000 in interest for those who have seen their original balances increase because of runaway interest. It would also provide relief to those who have been repaying their loans for 20 or 25 years, and those who went to college programs that leave graduates with high debt compared to their incomes.

Biden told the Education Department to pursue cancellation through a federal rulemaking process after the Supreme Court rejected an earlier plan using a different legal justification. That plan would have eliminated up to $20,000 for 43 million Americans.

The Supreme Court rejected Biden’s first proposal in a case brought by Republican states including Missouri.

In his order Wednesday, Hall said Georgia failed to prove it was significantly harmed by Biden’s new plan. He rejected an argument that the policy would hurt the state’s income tax revenue, but he found that Missouri has a strong case.

Missouri is suing on behalf of MOHELA, a student loan servicer that was created by the state and is hired by the federal government to help collect student loans. In the suit, Missouri argues that cancellation would hurt MOHELA’s revenue because it’s paid based on the number of borrowers it serves.

In their lawsuit, the Republican states argue that the Education Department had quietly been telling loan servicers to prepare for loan cancellation as early as Sept. 9, bypassing a typical 60-day waiting period for new federal rules to take effect.

Also joining the suit are Alabama, Arkansas, Florida, North Dakota and Ohio.

RELATED TOPICS:

DON'T MISS

Point-Counterpoint: Reps. Costa and Fong React to Trump’s Speech

DON'T MISS

Veterans Speak Out on Trump Administration’s Plans to Cut VA Budget

DON'T MISS

Google Leans Further Into AI-Generated Overviews for Its Search Engine

DON'T MISS

Chiefs Trading All-Pro Offensive Guard Joe Thuney to Bears for 2026 4th-Round Pick

DON'T MISS

LeBron Becomes First to Score 50,000 Combined Points in Regular Season and Playoffs

DON'T MISS

Roki Sasaki Pitches 3 Scoreless Innings in His Spring Debut With the Dodgers

DON'T MISS

Stephen Curry Scores 28, Improves to 12-1 at Madison Square Garden as Warriors Beat Knicks

DON'T MISS

Powerful US Storms Create Blizzard Conditions and Threaten to Spawn More Tornadoes

DON'T MISS

Catholic Church Opens Lent Season With Words of Solidarity for Pope Sidelined With Pneumonia

DON'T MISS

Former Los Angeles Fire Chief Fails to Get Job Back After Ouster Following Historic Deadly Wildfire

UP NEXT

Veterans Speak Out on Trump Administration’s Plans to Cut VA Budget

UP NEXT

Google Leans Further Into AI-Generated Overviews for Its Search Engine

UP NEXT

Chiefs Trading All-Pro Offensive Guard Joe Thuney to Bears for 2026 4th-Round Pick

UP NEXT

LeBron Becomes First to Score 50,000 Combined Points in Regular Season and Playoffs

UP NEXT

Roki Sasaki Pitches 3 Scoreless Innings in His Spring Debut With the Dodgers

UP NEXT

Stephen Curry Scores 28, Improves to 12-1 at Madison Square Garden as Warriors Beat Knicks

UP NEXT

Powerful US Storms Create Blizzard Conditions and Threaten to Spawn More Tornadoes

UP NEXT

Catholic Church Opens Lent Season With Words of Solidarity for Pope Sidelined With Pneumonia

UP NEXT

Former Los Angeles Fire Chief Fails to Get Job Back After Ouster Following Historic Deadly Wildfire

UP NEXT

Israel’s Cutoff of Supplies to Gaza Sends Prices Soaring as Aid Stockpiles Dwindle

Chiefs Trading All-Pro Offensive Guard Joe Thuney to Bears for 2026 4th-Round Pick

47 minutes ago

LeBron Becomes First to Score 50,000 Combined Points in Regular Season and Playoffs

50 minutes ago

Roki Sasaki Pitches 3 Scoreless Innings in His Spring Debut With the Dodgers

54 minutes ago

Stephen Curry Scores 28, Improves to 12-1 at Madison Square Garden as Warriors Beat Knicks

57 minutes ago

Powerful US Storms Create Blizzard Conditions and Threaten to Spawn More Tornadoes

1 hour ago

Catholic Church Opens Lent Season With Words of Solidarity for Pope Sidelined With Pneumonia

1 hour ago

Former Los Angeles Fire Chief Fails to Get Job Back After Ouster Following Historic Deadly Wildfire

1 hour ago

Israel’s Cutoff of Supplies to Gaza Sends Prices Soaring as Aid Stockpiles Dwindle

1 hour ago

Trudeau Not Willing to Lift Canada’s Retaliatory Tariffs if Trump Leaves Some Tariffs on Canada

1 hour ago

Bulldogs Snap Losing Streak With Home Win Over Wyoming

1 hour ago

Point-Counterpoint: Reps. Costa and Fong React to Trump’s Speech

Rep. Jim Costa, a Fresno Democrat, said that President Donald Trump’s address to Congress on Tuesday night “sowed division inste...

5 minutes ago

5 minutes ago

Point-Counterpoint: Reps. Costa and Fong React to Trump’s Speech

19 minutes ago

Veterans Speak Out on Trump Administration’s Plans to Cut VA Budget

22 minutes ago

Google Leans Further Into AI-Generated Overviews for Its Search Engine

47 minutes ago

Chiefs Trading All-Pro Offensive Guard Joe Thuney to Bears for 2026 4th-Round Pick

50 minutes ago

LeBron Becomes First to Score 50,000 Combined Points in Regular Season and Playoffs

54 minutes ago

Roki Sasaki Pitches 3 Scoreless Innings in His Spring Debut With the Dodgers

57 minutes ago

Stephen Curry Scores 28, Improves to 12-1 at Madison Square Garden as Warriors Beat Knicks

1 hour ago

Powerful US Storms Create Blizzard Conditions and Threaten to Spawn More Tornadoes

Help continue the work that gets you the news that matters most.

Search

Send this to a friend