Judge Extends Block on Biden’s $147 Billion Student Debt Forgiveness Plan

In a significant legal development, a federal judge has extended a temporary restraining order blocking the Biden administration’s student debt forgiveness plan.

The ruling threatens to derail President Joe Biden’s efforts to provide financial relief to millions of Americans before the November 5 presidential elections.

U.S. District Judge Randal Hall, appointed by former Republican President George W. Bush, ruled on Wednesday to keep the restraining order in place for an additional 14 days.

This decision marks another obstacle in the Biden administration’s ongoing efforts to cancel federal student loans, as Hall’s court will review requests from both sides: the plaintiffs’ request for a preliminary injunction and the Biden administration’s request to dismiss the case entirely.

Legal Battle Over Student Debt Relief

The restraining order was first issued on September 5, following a lawsuit by seven Republican-led states. Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio filed the lawsuit, challenging the legality of the U.S. Department of Education’s new debt cancellation plan.

These states argue that the administration’s student debt forgiveness proposal violates federal rules, as it allegedly attempted to implement the plan prematurely before the final rule was issued in October.

The Biden administration, however, disputes these claims. A senior official told CNBC that they did not plan to begin forgiving student loans—up to $147 billion for as many as 25 million Americans—until receiving legal clearance.

Still, Republican challenges have consistently undermined the White House’s attempts at implementing student debt relief programs.

Biden’s Campaign Promise and Setbacks

President Biden has made student loan forgiveness a cornerstone of his policy agenda since his 2020 campaign.

His plan seeks to forgive debt for four groups of borrowers: those who owe more than they initially borrowed, borrowers who have been repaying for decades, students from schools with low financial value, and those eligible for forgiveness under existing programs but who have yet to apply.

The White House estimates that three out of four federal student loan holders would benefit from the policy, with up to $147 billion in loans eligible for cancellation.

Over the summer, the Biden administration had already begun notifying millions of student loan borrowers of their potential eligibility for forgiveness.

However, legal roadblocks, particularly from Republican-led states and courts, have delayed these efforts.

Trump’s Criticism of Debt Forgiveness

The issue of debt forgiveness has become a point of contention in the 2024 presidential race.

During the presidential debate on September 10, former President Donald Trump criticized the Democrats’ promise to forgive student loans.

Trump likened Vice President Kamala Harris’s pledge to protect abortion rights to Democrats’ unfulfilled promises of student debt relief.

“It’s just talk,” Trump said. “They didn’t even come close to getting student loans terminated. They taunted young people, and a lot of other people that had loans. They can never get this approved.”

Trump’s remarks reflect a broader Republican criticism of the Biden administration’s student debt relief efforts.

Nevertheless, it has been Republican-led legal challenges that have actively prevented the implementation of debt forgiveness, with many conservative judges ruling against the aid packages.

Future of Debt Forgiveness

This latest legal setback mirrors the challenges faced by Biden’s earlier attempt at widespread student loan forgiveness.

In June 2023, the Supreme Court struck down Biden’s first plan to cancel student debt, ruling 6-3 along ideological lines, with liberal justices supporting the initiative.

As the Biden administration now faces another review from Judge Hall’s court, millions of borrowers continue to wait for financial relief.

The legal battles highlight the deep political divide surrounding student debt forgiveness and its potential impact on the upcoming 2024 elections.

Also Read: Google Wins Major Court Battle as EU Overturns $1.7 Billion Fine Over AdSense Contracts