After Court Ruling Biden Student Loan Forgiveness Program Picks Up More Steam
A key ruling in recent court cases could further pave the way for President Joe Biden student loan forgiveness. The plan was blocked after a federal judge allowed to an expire a temporary restraining order (TRO) Collectively, more than 25 million borrowers stand to gain from the relief program, and this decision brings hope for them.
Judge’s Ruling and Its Impact
On Thursday, U.S. District Judge J. Randal Hall allowed the TRO to expire that blocked federal student loan forgiveness. The court ruling is in response to a lawsuit filed by seven Republican-led states (Missouri, Georgia, Alabama, Arkansas, Florida, North Dakota and Ohio) wanting to block Biden”s plan. The states argued that the program is an overreach of Presidential authority and would hurt state budgets.
But a judge found Georgia lacked the legal ability to move forward and dismissed the state as an interested party in the lawsuit. The matter now falls to Missouri because that state’s loan servicer, The Missouri Higher Education Loan Authority (Mohela), is the centerpiece of states’ complaints.
What Biden’s Plan Includes
Some borrowers are omitted under Biden’s student loan forgiveness plan The plan will forgive loans above a certain amount for the following:
Individuals who borrowed money and now owe more than they borrowed because of the interest rate.
People who have paid loans for more than 20—25 years.
Borrowers who went to schools with high debt-to-income in the education sector
Existing forgiveness programs are eligible; people who qualify but have not applied
It would also forgive up to $20,000 in interest based on income for borrowers enrolled in an income-driven repayment plan.
Challenges and Next Steps
While not a clear victory, this ruling is a small step in the right direction. But even before the rule is finalized, a Missouri court could issue an injunction to stop the program. GOP-led states have already requested an injunction on the order.
But the Biden Administration is sticking to its guns. A spokesman for the Department of Education attacked the continuing lawsuit as an attempt to keep millions from receiving student loan relief.
The Endpoint: Political and Economic Implications
Over 25 million borrowers could benefit from Biden’s plan revealed in April. The White House has estimated that the relief plan will cost some $147 billion over 10 years. Still, the administration is not backing down and plans to give millions of student-loan borrowers a break from their debts.
Conclusion
With the temporary restraining order on expire, Biden’s student loan forgiveness plan might continue soon. This recent ruling may represent good news for the administration, but it still faces a lawsuit in Missouri that could slow its efforts even further as it attempts to address student debt burdens in America.