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Source: The College Investor
- A Georgia judge handed the Biden administration a temporary victory by moving a legal challenge over student loan forgiveness to Missouri.
- The ruling temporarily cleared the loan forgiveness plans for about 20 hours.
- The program is now blocked again by an injunction from a Missouri court.
The Biden administration secured a brief legal victory on October 2, 2024, when a Georgia judge ruled that Georgia had no standing and instead transferred the case to a Missouri court. As part of the ruling, the injunction blocking student loan debt relief was lifted.
That victory was short-lived, however, as a federal court in Missouri issued another preliminary injunction late on October 3, blocking the plan again.
President Biden's updated student loan forgiveness program, often referred to as “Plan B,” was launched after the Supreme Court rejected the administration's original debt relief plan. Under the new program, millions of borrowers could receive targeted relief based on factors such as how long it took to repay loans, accrued interest and whether they attended institutions that didn't meet federal standards.
Although the legal basis for this program differs from the first, it faced strong opposition in several Republican-led states.
Georgia Verdict: Short-Lived Victory
In September, a Republican-led coalition of states, led by Missouri, filed a lawsuit seeking to block the Biden administration from implementing its upcoming student loan forgiveness plan. The states argued that the plan would harm state finances, particularly through losses to state-affiliated student loan providers like Missouri-based MOHELA. A judge in Georgia responded by issuing a temporary restraining order and putting forgiveness initiatives on hold.
In a surprise ruling on October 2, the Georgia court found that the state of Georgia, one of the plaintiffs, did not have sufficient standing to recover damages from the student loan forgiveness plan. However, rather than dismissing the case, the judge remanded the lawsuit to Missouri, acknowledging that Missouri's reliance on MOHELA gave the state a stronger opportunity to challenge the program.
That move briefly opened the door for the Biden administration to move forward with implementing the program.
Missouri Ruling: Another Injunction
Unfortunately for the borrowers, the victory was short-lived. Late on October 3, 2024, a federal court in Missouri issued another preliminary injunction, once again halting Biden's loan forgiveness program.
Missouri has played a central role in the legal effort to stop Biden's attempts to forgive mass student loans.
The state previously managed to use MOHELA, the state-affiliated loan servicer, as a basis for legal standing. This litigation marks the third time Missouri has been involved in lawsuits aimed at blocking student loan forgiveness efforts, and it follows ongoing litigation against the administration's SAVE plan.
What's next for borrowers?
For now, borrowers will have to wait and see how the Missouri court proceeds. The same goes for awaiting the outcome of the SAVE Plan litigation, which may see initial rulings next month.
The problem is that millions of borrowers are stuck in limbo and these slingshot judgments on student loans are only making things worse.
Don't miss these other stories:
What is the SAVE repayment plan? 73% of Americans support student loan forgiveness if you use a HELOC to pay student loans compared to student loans
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