A federal judge dealt a blow to Republican attempts to block President Biden’s student loan forgiveness initiative on Wednesday, allowing the government to move forward with its debt cancellation plan just weeks ahead of the November elections.
U.S. District Judge Randal Hall, based in Augusta, dismissed Georgia from a lawsuit filed by seven Republican-led states against the Biden administration, ruling that Georgia did not have the legal standing to challenge the loan forgiveness plan. The judge noted that the state failed to demonstrate any harm resulting from the proposed elimination of $73 billion in student loan debt affecting millions of Americans.
This decision came just one day before a temporary restraining order issued by Hall on September 5 was due to expire. The judge chose not to extend the order, enabling the Department of Education to finalize regulations to implement Biden’s debt relief strategy.
Georgia had argued that the student loan forgiveness would result in tax revenue losses, but Hall, a Republican appointee, disagreed, moving the case to federal court in Missouri instead.
“There is no indication that the rule is being implemented to attack the states or their income taxes, so any loss of … tax revenue is incidental and insufficient to create standing for Georgia,” Hall wrote in his ruling.
Previously, Hall had determined that Missouri had standing to sue due to its operation of a nonprofit student loan servicer that would face significant financial losses under the debt relief plan.
The Biden administration proposed this regulation in April after earlier initiatives faced legal obstacles. During the 2020 election, Biden pledged to provide debt relief to millions of Americans who relied on federal student loans for their education. The proposed regulation aims to offer full or partial debt relief to approximately 27.6 million borrowers.
Alongside Georgia and Missouri, Republican attorneys general from Alabama, Arkansas, Florida, North Dakota, and Ohio are also part of the lawsuit contesting the policy. The states have asked U.S. District Judge Matthew Schelp in Missouri, a Trump appointee, to decide on Friday whether to extend the temporary restraining order against the proposal.
A spokesperson for the Department of Education praised the judge’s decision, stating, “This case has no legal basis to be brought in Georgia,” and described the GOP lawsuit as an effort “to prevent millions of their own constituents from getting breathing room on their student loans.” The spokesperson reiterated the administration’s commitment to legally delivering relief to more Americans and defending these proposals in court.
The Biden administration’s plan aims to assist borrowers who owe more than their original loan amounts due to accrued interest, those who have been in repayment for at least 20 to 25 years, and individuals eligible for loan forgiveness under prior programs who did not apply.
The Justice Department contended that because the Department of Education had not yet finalized the rule, there was no agency action for the judge to review in this matter. Conversely, the Republican states argued that the Biden administration was poised to immediately cancel student loan debt once the rule was finalized, before any potential legal challenge could occur.
The White House maintains that the student loan bailout is a necessary measure to provide relief to millions burdened by educational debt. Republican critics argue that the president lacks the authority to cancel student loan debt without congressional approval and claim the bailout is unfair to taxpayers and borrowers who have already repaid their loans without assistance.