Biden student loan forgiveness plan gets a win in federal court

Ray Bogan

President Biden’s student loan forgiveness plan can move forward after a federal judge allowed a temporary restraining order to expire. This however does not mean the Biden administration won the case, it will continue working its way through the federal court system. 

The lawsuit was filed by seven Republican states – Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio. They argued Biden’s new plan to forgive student debt is illegal. 

On Wednesday, a federal judge removed Georgia from the case and moved it to Missouri. The judge determined Georgia lacked legal standing to sue; the state said they could potentially lose tax revenue but the judge determined that would be incidental. The judge determined Missouri does have standing to sue because it operates a nonprofit student loan servicer, called MOHELA, which could potentially lose millions of dollars if the Biden plan is ultimately approved. 

A Department of Education spokesperson told NBC News – “The fact remains that this lawsuit reflects an ongoing effort by Republican elected officials who want to prevent millions of their own constituents from getting breathing room on their student loans.” 

This loan forgiveness was announced after the Supreme Court struck down Biden’s original plan to forgive approximately $400 billion in loans for as many as 43 million Americans back in June 2023. 

This debt relief effort would have canceled up to $20,000 for borrowers whose balances are greater than the original total, something that happens on income driven plans when interest builds. 

It would have also provided debt cancellation for undergraduate borrowers who entered repayment before July 2005 or graduate borrowers who entered repayment before July 2000. 

There are multiple other ways to get relief under the plan. The Department of Education is still working to finalize who will qualify.