Biden's brief win in battle for student loan forgiveness scuttled in court
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President Biden in Madison, Wisconsin, on April 8. Photo: Daniel Steinle/Bloomberg via Getty Images
The Biden administration saw a brief, temporary glimmer of hope for its new plan to provide student debt relief in the courts this week.
The big picture: In the president's waning days in office, his administration's attempts to relieve debt for millions of borrowers are facing a familiar streak of conservative legal challenges.
What's happening: Trump-appointed U.S. District Judge Matthew Schelp in Missouri issued a preliminary injunction Thursday halting the debt relief plan after another judge had allowed a pause to expire.
- U.S. District Judge Randal Hall had shortly before allowed the expiration of a temporary restraining order on the Biden administration's student loan plan introduced earlier this spring. He also dismissed Georgia from the lawsuit and transferred the case to Missouri.
- Hall's ruling marked a small win for Biden and over 30 million borrowers who could receive relief with the new initiative after a series of GOP-backed legal challenges blocked the move.
- If Hall's decision stands, it would clear the way for the Biden administration to proceed in finalizing the program.
Catch up quick: Republican attorneys general in seven states — Missouri, Georgia, Alabama, Arkansas, Florida, North Dakota and Ohio — sued in September to block the student loan proposal, arguing it's illegal and exceeds the administration's authority.
- Hall in Georgia issued a temporary restraining order on Sept. 5 and extended it on Sept. 19.
State of play: Hall on Wednesday granted, in part, a motion to dismiss the case from the Department of Education, per the court order.
- He dismissed Georgia, which had argued it could face harm from potential tax revenue losses, from the lawsuit, finding the state failed to show sufficient harm and determining it could not serve as the venue for the suit.
- The judge directed the case to be transferred to the United States District Court for the Eastern District of Missouri because the states in the suit rely on harm to student loan servicer MOHELA, headquartered in Missouri, as the primary basis for standing.
- Missouri Attorney General Andrew Bailey has argued the servicer would lose revenue if loans are erased or reduced.
- Bailey in a post to X called the preliminary injunction "a huge win for transparency, the rule of law, and for every American who won't have to foot the bill for someone else's Ivy League debt."
What they're saying: A spokesperson for the Department of Education said "While we appreciate the District Court's acknowledgment that this case has no legal basis to be brought in Georgia, the fact remains that this lawsuit reflects an ongoing effort by Republican elected officials who want to prevent millions of their own constituents from getting breathing room on their student loans."
- The spokesperson added that they'll continue "lawful efforts to deliver relief to more Americans, including by vigorously defending these proposals in court."
- Persis Yu, deputy executive director and managing counsel at advocacy group Student Borrower Protection Center, said the case is "as absurd as it is dangerous" and is "far from over."
- "The decision to file this case in the Brunswick Division of the Southern District of Georgia — a carefully chosen court with a single Republican-appointed judge — was a clear and desperate move to undermine democracy and stack the odds against working families," Yu said in a statement.
More from Axios:
- Judge keeps Biden's latest student loan forgiveness plan blocked
- GOP-led states sue to block Biden's student debt relief plan again
- Key student loan protection ended Sept. 30, here's what borrowers should know
Editor's note: This article has been updated with details of the later ruling and comment from Missouri Attorney General Andrew Bailey.
