A federal judge has once again blocked the Biden administration’s student loan forgiveness plan, extending a temporary restraining order for an additional 14 days.
U.S. District Judge Randal Hall ruled that “good cause exists” to prolong the freeze on the administration’s effort to cancel billions of dollars in student debt.
This decision is a significant victory for a coalition of Republican-led states challenging the program.
The plan, referred to as the “Third Mass Cancellation Rule” in court filings, was halted following a lawsuit led by Missouri and supported by six other states: Alabama, Arkansas, Florida, Georgia, North Dakota, and Ohio.
The lawsuit alleges that the Biden administration’s initiative to forgive $73 billion in student loans is being carried out “unlawfully” and without proper public notice or Congressional approval.
Judge Hall’s extension of the restraining order, initially issued on September 5, comes as both sides presented their arguments in court on September 18.
The plaintiffs, represented by the attorneys general from the seven states, are seeking a preliminary injunction to block the plan permanently.
They argue that Education Secretary Miguel Cardona’s actions to implement the program lack legal standing and bypass necessary regulatory processes, such as the 60-day public notice rule.
In his ruling, Judge Hall noted that the extension would allow the court to thoroughly review the briefs and oral arguments presented before making a final decision on the broader motions.
Missouri Attorney General Andrew Bailey hailed the ruling as a “huge win” for those opposing the plan.
The lawsuit stems from claims that Secretary Cardona is moving forward with the debt cancellation process in secret.
According to court documents, the plaintiffs accuse the Department of Education of instructing federal contractors to begin canceling debts as early as September 7, despite the legal challenges.
If fully implemented, the “Third Mass Cancellation Rule” could potentially wipe out $146.9 billion in student loan debt, according to the plaintiffs.
This latest setback marks the third time the Biden administration has faced legal challenges in its efforts to forgive student loans.
The administration’s first attempt was blocked by the U.S. Supreme Court when it ruled that the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act could not be used to justify mass debt cancellation.
The second effort, linked to the Saving on a Valuable Education (SAVE) plan, faced similar opposition.
The SAVE program, designed to reduce monthly payments for millions of borrowers, was halted by the U.S. Court of Appeals for the Eighth Circuit, which found that the plan violated the major questions doctrine.
This doctrine restricts federal agencies from implementing sweeping policy changes without clear authorization from Congress.
Although the Biden administration has touted the SAVE plan as a relief measure for borrowers, the court’s nationwide injunction prevents the forgiveness of both student loan principal and interest under the program.
As the legal battle continues, the Biden administration has requested that Judge Hall dismiss the lawsuit entirely.
Meanwhile, Republican state officials continue to argue that the program is a massive overreach of executive power and a financial burden on taxpayers.
With the freeze now extended, the court has more time to weigh the potential economic impact and legal validity of Biden’s student debt forgiveness plans.
The case is expected to continue drawing attention as both sides prepare for the next legal steps.