Good news for millions of student loan borrowers: A federal judge ruled to remove Georgia from the lawsuit against Biden’s student debt forgiveness plan. This decision could benefit about 26.7 million borrowers in the state.
On Thursday, J. Randal Hall, a Georgia-based U.S. District Judge, ruled that the temporary restraining order preventing the Biden administration from executing the SAVE plan has elapsed.
The George state was leading the legal action alongside Missouri; however, Hall clarified that there is no evidence that Georgia would be harmed by the federal government’s decision to cancel student loan debt of about $73 billion.
Only Florida, Missouri, Alabama, Arkansas, Ohio, and North Dakota will serve as the plaintiffs. Because Georgia lacks legal standing, litigation for the case will be shifted to Missouri.
Initially, Georgia claimed it could face tax revenue losses and had the constitutional right to challenge Biden’s Education Department.
Hall stated: “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, however, ruled that Missouri can proceed with the lawsuit because the state operates a non-profit student loan servicer, Missouri Higher Education Loan Authority (MOHELA). Based on the student loan forgiveness plan, the servicer can lose millions of dollars.
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, described Hall’s ruling as a “ray of hope” for borrowers who are eligible for student debt forgiveness.
Beene told the media, “It’s a huge win for student loan borrowers who qualify for the forgiveness terms the Biden administration outlined.”
“The temporary suspension of the loan forgiveness program was an attempt to halt further forgiveness efforts under the grounds of them being financially detrimental to certain states. With that suspension not extended, for the time being, the forgiveness initiative can resume, although the odds are high we’ll continue to see legal challenges to these efforts in the coming months.”
Biden’s first student debt forgiveness initiative was blocked by the Supreme Court; however, the administration developed full debt cancellation and partial forgiveness programs for about 27.6 million Americans.
The specific student debt forgiveness initiative in question was designed for those who owe more than the amount borrowed because of interest and those who have made payments for at least 20 or 25 years in some instances.
Student loan debtors who qualify for forgiveness under the previous initiatives but never sign up also stand a chance of getting their debt cancelled.
According to the states that filed the lawsuit, the debt cancellation initiatives overreach the federal government’s authority and unfairly benefit those who attended college over those who didn’t.
A spokesperson for the Department of Education told the media, “While we appreciate the District Court’s acknowledgment that this case has no legal basis to be brought in Georgia, 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.”
“The draft rules would bring the total number of borrowers eligible for student debt relief under the Biden-Harris Administration to over 30 million people. We will continue our lawful efforts to deliver relief to more Americans, including by vigorously defending these proposals in court. We will not stop fighting to fix the broken student loan system and provide support and relief to borrowers across the country.”
