A federal judge allowed a temporary restraining order against the Biden administration’s student loan forgiveness plan to lapse today. With the order gone, the administration would have been free to move forward with the plan and provide relief for over 25 million Americans. However, just hours later, another hurdle blocked it again.
Why won’t Biden’s student loan forgiveness plan move forward?
In September, a temporary restraining order was issued by a federal court in Georgia against Biden’s student loan forgiveness program. This action was part of a larger lawsuit by seven Republican-led states: Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio. The states claim that the plan would unfairly burden taxpayers and infringe on state revenues.
According to Time, the restraining order from Georgia was meant to lapse this week, and U.S. District Judge J. Randal Hall removed the state from the lawsuit after ruling that it hadn’t sufficiently demonstrated it would suffer concrete harm from the program. As a result, the case was transferred to the Eastern District of Missouri.
Unfortunately, according to CNET, a Missouri judge issued an injunction against the student loan forgiveness plan as soon as the case was transferred. That means it’s again on hold until the injunction is lifted.
Many student loan recipients have had their repayment plans put on hold for years now. During the COVID epidemic, loan payments were paused and then placed in forbearance. Biden’s forgiveness plan has been held up in courts, and most will have to resume payments if the lawsuit mentioned above succeeds.
On the other hand, if Biden’s Plan B forgiveness plan is allowed to move forward, the following borrowers would be able to discharge all or part of their loans:
- Those who have a loan balance that’s grown significantly due to interest.
- Individuals who have undergraduate loans and entered repayment more than 20 years ago.
- Those who have graduate loans and entered repayment more than 25 years ago.
- People who would have been eligible for forgiveness under an existing income-driven repayment plan.
- Those who have experienced significant financial hardship.
- Students who attended a school that lost federal funding.
For now, those with student loans should assume that they won’t be forgiven and budget accordingly. Even if the lawsuits from each state are dismissed, further legal challenges might stall the plan for years to come.
