Federal Judge Blocks Biden Management’s student Loan Forgiveness Plan
A federal judge in Missouri blocked the Biden administration’s plan to cancel up to $20,000 in student loan debt for millions of Americans on Thursday, November 9, 2023.U.S. District Judge John A. Ross ruled that the plan exceeded the administration’s authority and violated the Administrative Procedure Act.
The lawsuit was brought by six republican-led states – Missouri, Arkansas, Iowa, Kansas, Nebraska, and South carolina - arguing the plan would harm thier state-based student loan programs and was an overreach of executive power.Missouri argued the debt cancellation would financially harm MOHELA,the state’s student loan servicer,which manages loans for the federal goverment.
The Biden administration estimated the plan would have provided relief to over 40 million borrowers and perhaps canceled up to $400 billion in debt.Approximately 22 million borrowers had already been approved for relief before the injunction.
The Justice Department filed a notice of appeal on November 9, 2023, signaling the administration’s intent to fight the ruling. “we strongly disagree with the court’s decision,” said White House spokesperson Abdullah Hasan in a statement. “The Biden-Harris Administration remains committed to providing relief to borrowers.”
This is not the first legal challenge to the program. The Supreme Court previously blocked a similar, earlier version of the plan in June 2023. The current ruling applies nationwide while the appeal proceeds.
Borrowers are still required to make payments on their student loans. The student loan payment pause, which began during the COVID-19 pandemic, ended in October 2023.
