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For millions of federal student loan borrowers, the legal roadblock continues.
The U.S. District Court for the Southern District of Georgia on Thursday issued a temporary injunction blocking President Joe Biden’s second attempt to use the 1965 Higher Education Act to more broadly forgive student loans.
The order came just two days after a group of seven Republican state attorneys general filed a lawsuit to block the new relief plan while it has yet to be finalized. The lawsuit alleges that the Biden administration is violating regulatory procedures by planning to implement the relief ahead of schedule.
Internal documents obtained by the states and attached to the complaint include a Department of Education memo to the services company MOHELA stating, “In September 2024, the Biden-Harris Administration will launch a Federal Student Loan Debt Initiative.”
The six-page order states that President Biden is “temporarily prohibited from implementing the Third Mass Cancellation Rule” and that the administration is prohibited from “further implementing mass cancellation of student loans, forgiveness of principal or interest, not charging borrowers for accrued interest, or any other action under the rule or directing Federal contractors to take such actions.”
The ruling said that to get a temporary injunction, a state must show how it would be harmed by the policy at issue — a requirement the Republican-led state met. That’s because the relief was alleged to have hurt the revenues of MOHELA, the student loan agency that is an agency in Missouri, one of the states that joined the lawsuit.
The Department of Education did not immediately respond to Business Insider’s request for comment on the ruling. After the lawsuit was filed on Tuesday, a spokesperson for the department said the department “will continue to support borrowers and fight for affordable repayment options and relief for those who qualify.”
The plan was set to take effect in October. Following the ruling, the timeline for when or if relief will reach more than 30 million borrowers remains unclear as the legal process continues.
Some Republicans applauded the court’s decision Thursday. Sen. Bill Cassidy, the top Republican on the Senate Education Committee, said: Written As for X, he said: “The administrators know they have no legal authority, but this is an attempt to buy votes.”
Many of Biden’s student loan debt relief policies have faced legal challenges: Last summer, the Supreme Court struck down Biden’s first attempt at broad debt relief, and more recently, a federal judge blocked the Department of Education from implementing Biden’s new income-contingent repayment plan, SAVE, which aims to reduce borrowers’ monthly payments and shorten the time it takes to get debt relief.
These legal battles have left millions of borrowers in limbo, creating uncertainty about the future of student loan repayments and possible relief while they await final court decisions.
