Just as a brief window of opportunity for President Joe Biden’s student loan cancellation plan seemed to open, a federal judge in Missouri slammed the door shut, issuing a temporary injunction blocking the program, The Associated Press reports.
The decision came hours after another judge in Georgia declined to extend a previous order that had put the plan on hold since September. The latest legal setback leaves the future of the plan, which would provide relief to millions of borrowers, uncertain.
Six Republican-led states, spearheaded by Missouri’s Attorney General, successfully argued that the Education Department’s plan to cancel up to $20,000 in student loan debt for eligible borrowers was unlawful. They claimed the department was rushing ahead with the program without following proper procedure and could cause “unlawful mass cancellation” of loans totaling hundreds of billions of dollars.
Missouri District Judge Matthew Schelp, agreeing with the states, called the decision an “easy one.” He granted the injunction, effectively stopping any widespread cancellation for the time being.
The states’ lawsuit challenges the Education Department’s legal authority to enact the cancellation plan, arguing that it would negatively impact Missouri’s Higher Education Loan Authority (MOHELA), a student loan servicer created by the state. They claim MOHELA would lose revenue due to fewer borrowers needing its services.
The legal battle over Biden’s student loan cancellation plan has been ongoing for months. A previous plan, which relied on a different legal justification, was struck down by the Supreme Court earlier this year. Biden then instructed the Education Department to pursue a new path through federal rulemaking, the route now being challenged by the states.
Proponents of student loan forgiveness were hopeful that the recent decision by the Georgia judge to let the previous injunction expire would pave the way for the program to move forward. However, the Missouri judge’s injunction throws the plan back into limbo, leaving many borrowers facing continued uncertainty about their debts.
The battle over the student loan cancellation plan is far from over. The states’ injunction is temporary, and legal challenges are expected to continue as the Biden administration fights to implement its program.
