Biden’s $147B student debt cancellation paused again by federal judge
President Biden’s $147 billion student debt handout was paused again by another federal judge on Thursday, one day after a stay was temporarily lifted as the case’s venue shifted from Georgia to Missouri.
St. Louis US District Judge Matthew Schelp wrote that he “agrees fully” with the reasons that led Augusta, Ga., US District Judge Randal Hall to initially block the loan forgiveness from going into effect — and granted the Republican-led states bringing the lawsuit a preliminary injunction.
In a signed Oct. 3 order, Schelp wrote that it was in the public’s interest to pause the Biden administration’s third mass cancellation effort, which a group of GOP state attorneys general alleged in September would “unlawfully” cancel $73 billion “overnight” and $146.9 billion in total for up to 27.6 million student borrowers.
“Balancing the harm and the injury, merged with the public’s interest, easily leads this Court to the conclusion that preliminary injunctive relief should issue,” said Schelp, an appointee of former President Donald Trump. “The public has an immense interest in its own government following the law.”
In a statement to the Associated Press, Missouri Attorney General Andrew Bailey hailed the ruling as “yet another win for the American people.”
“The Court rightfully recognized Joe Biden and Kamala Harris cannot saddle working Americans with Ivy League debt,” Bailey said.
A spokesperson for the Department of Education said the agency was “extremely disappointed by this ruling on our proposed debt relief rules, which have not yet even been finalized.”
“This lawsuit was brought by Republican elected officials who made clear they will stop at nothing to prevent millions of their own constituents from getting breathing room on their student loans,” the spokesperson added. “We will continue to vigorously defend 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.”
Hall issued an order Wednesday saying that the lawsuit brought by the Republican state AGs lacked standing because it didn’t harm Georgia’s tax revenue, though the judge acknowledged in an earlier ruling that Missouri’s revenue would be affected.
From Sept. 5, two days after the suit was filed, until Oct. 2, when he removed the case from his jurisdiction, Hall had imposed a temporary restraining order on the student debt cancellation started by Education Secretary Miguel Cardona in April.
Unlike two earlier attempts that were blocked by federal courts and the US Supreme Court, the Biden Education Department’s most recent loan forgiveness plan would have automatically enrolled students “with at least one outstanding federally held student loan” unless they opted out.
The cancellation would have erased debt for student borrowers with up to $20,000 in debt, including those with household incomes above $240,000 per year, or who had been paying it off for more than 20 years.
The previous debt cancellations — costing taxpayers up to $430 billion and $475 billion, respectively — were blocked by the courts from taking effect, though the latter is still working its way through the appeals circuit.
The former was struck down last year for making use of a 2003 law designed for Iraq and Afghanistan war veterans to unconstitutionally and unilaterally cancel up to $430 billion in debt for 43 million student borrowers.
The administration has already forgiven $169 billion in debt for 4.8 million student borrowers, which Biden and Vice President Kamala Harris have touted in swing states ahead of the 2024 election — prompting Republicans to accuse the them of trying to “buy votes.”
“Once again, the courts rebukes the Biden-Harris administration’s underhanded attempts to transfer $147 billion in debt onto taxpayers with no congressional approval,” said Sen. Bill Cassidy (R-La.) in a statement.
“The Biden-Harris administration is not ‘forgiving’ debt—they are taking it from those who willingly took it out and transferring it onto those who didn’t go to college or already paid off loans,” added Cassidy, who chairs the Senate Health, Education, Labor and Pensions Committee. “This scheme is an abuse of power and a shameless bid to buy votes on the eve of an election at taxpayers’ expense.”