A federal judge ruled on Wednesday that the Biden administration can move forward with its student loan forgiveness program, which aims to forgive the debt of more than 25 million Americans before the end of the president’s term. U.S. District Judge Randal Hall determined that Georgia was not the appropriate venue for the case brought by seven GOP-led states, including Alabama, Arkansas, Florida, Missouri, North Dakota, and Ohio, and allowed a previous restraining order on the program to expire.
The program, which is estimated to cost $147 billion over the next decade, would forgive the debt of borrowers whose debt exceeds the amount they initially borrowed after interest, those with loans older than 20 or 25 years, and those who attended career-training programs that resulted in high debt or low earnings. Additionally, single borrowers earning less than $120,000 and married couples with a combined income under $240,000 who are enrolled in income-driven payment plans could have all of their interest forgiven.
The lawsuit filed by the states argued that the Biden administration illegally instructed loan servicers to begin eliminating debt before the rule was finalized, as federal law requires a 60-day buffer period after implementation. Missouri also claimed that the program would cause their state agency that administers federal student loans and state scholarships to lose revenue. This program was the Biden administration’s second attempt at student loan forgiveness after a previous plan to forgive up to $20,000 to more than 40 million borrowers was struck down by the Supreme Court last year.
The Student Borrower Protection Center nonprofit has called the legal decision a “small victory for democracy” and highlighted the importance of providing relief to over 30 million Americans burdened by student loan debt. They warned that legal challenges are likely to continue as states seek an injunction on the program. The Biden administration’s goal with this program is to provide vital relief to borrowers trapped in a cycle of unaffordable debt.
Overall, the ruling by Judge Hall paves the way for the Biden administration to finalize the student loan forgiveness program and provide much-needed relief to millions of borrowers across the country. The dispute between the administration and the GOP-led states will likely continue to play out in court as the states seek to impose an injunction on the program while they pursue their lawsuit. This decision is just one step in the ongoing battle over student loan debt and the efforts to provide relief to those struggling to repay their loans.
