Judge Blocks Biden's Student Debt Forgiveness Plan Amid Legal Challenges

A U.S. judge has temporarily halted President Joe Biden's new student debt forgiveness plan following a lawsuit by seven Republican-led states. The states argue the Education Department lacks authority to cancel loans, potentially unconstitutionally forgiving $73 billion. A hearing is scheduled for September 18 to further address the policy.

A U.S. judge on Thursday temporarily blocked President Joe Biden's administration from implementing its latest student debt forgiveness plan, following a lawsuit filed by seven Republican-led states. The injunction was issued by U.S. District Judge J. Randal Hall in Augusta, Georgia, who said the states had demonstrated a likelihood of proving the Education Department lacked the authority to cancel student loans under the plan.

Judge Hall referenced recent rulings against similar federal student loan forgiveness plans and issued a temporary restraining order after Republican state attorneys general sued over a proposed rule from April. The rule aimed to provide full or partial debt relief to certain borrowers but has yet to be finalized. States like Missouri argued that loan servicers had been instructed to begin canceling loans, potentially resulting in $73 billion in unlawful forgiveness.

The Biden administration estimates the cost of the policy at $146.9 billion, though states claim it would be much higher. The temporary order remains in effect until a September 18 hearing. Republicans argue that the costs are unfair to taxpayers covering others' college debts. The Education Department is reviewing the ruling and remains committed to borrower relief. This lawsuit adds to the legal battles against Biden's debt relief efforts, following a Supreme Court decision blocking a $430 billion program in June 2023.

(With inputs from agencies.)