A federal judge on Thursday placed a temporary hold on another component of President Biden’s student debt relief plan, siding with a coalition of seven Republican states that filed a lawsuit Tuesday to block the program.
The ruling comes as another blow to the President’s student debt relief agenda The Supreme Court also upheld a similar holding At the SAVE program, canceling millions of dollars in student debt is the centerpiece of his strategy.
This plan On Thursday’s issue rule It is for debt cancellation for up to 27 million borrowers who saw interest on their loans over time or who were still paying off the loans after at least 20 years.
Although the policy isn’t scheduled to go into effect until the fall, the states bringing the lawsuit argued they’ve obtained evidence that the Education Department has notified federal contractors to begin canceling some balances “immediately.”
“Through cloak and dagger, the Department has thus finalized a rule with a rollout plan designed to waive tens or hundreds of billions of dollars at most without any judicial review and to boost the incumbent Democratic presidential candidate two months before the election, ” A complaint was filed on Tuesday Read on
The department did not immediately respond to a request for comment.
Among the key elements of the rule, there is a provision to waive the entire amount of accrued interest to borrowers if they earn less than $120,000 for single borrowers or less than $240,000 for married couples and are enrolled in an income-based repayment plan. Another provision allows for a one-time, automatic cancellation of up to $20,000 in accrued interest for borrowers regardless of income.
Borrowers with at least 20 years of undergraduate debt or 25 years of graduate debt will also have their balances automatically forgiven under the rule. And a small number of students who attended schools that closed or whose graduates didn’t find a meaningful number of jobs will also see their debt written off.
Judge J. Randall Hall, a federal judge for the Southern District of Georgia, ordered the temporary ban, saying the states had established a likelihood that the Department of Education had exceeded its authority, and that it could well win the lawsuit.
“This is especially true in light of recent rulings across the country striking down similar federal student loan forgiveness programs,” Judge Hall wrote.
Like the temporary injunction placed on the SAVE plan, Thursday’s order prevents the Department of Education from moving forward with its student debt programs while legal challenges play out in court.
But Republicans have consistently distanced themselves from the attorney general’s enthusiastic collective administration debt relief programs, arguing that they hurt taxpayers by forcing the government to absorb the costs of outstanding loans and interest balances.
States that have claimed to block the rule include Missouri, Georgia, Alabama, Arkansas, Florida, North Dakota and Ohio. Large coalitions were also linked Challenge the save plan In two separate cases, as well as the Biden administration Revised Title XI Regulations.
“This is a huge win for every American who won’t have to pay someone else’s Ivy League debt,” Andrew Bailey, Missouri’s attorney general, who has helped fight several challenges, wrote on social media.
The Department of Education has repeatedly promised to keep borrowers informed about the status of its programs on its website As legal challenges mount, borrowers are left in limbo. While no one was directly affected by Thursday’s order as the rule has not been finalised, more than 80 lakh people who had enrolled in SAVE plans are still awaiting the outcome of that case for clarification on the amount owed.
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