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Not even a full day after a small win was announced for the Biden administration’s student loan forgiveness plan, a Missouri judge issued an injunction against the plan, placing it back on pause.
The Biden administration’s second attempt at widespread student loan forgiveness, often called “Plan B” by student loan experts, was first put on hold in September by a federal court in Georgia. The temporary hold was set to expire this week.
On Wednesday, US District Judge Randal Hall determined that the state of Georgia had failed to demonstrate that the plan would cause harm to the state. The judge ruled to transfer the case to Missouri and let the restraining order against the debt relief plan expire.
After the decision, Elaine Rubin, a student loan and policy expert with Edvisors, told CNET that the decision didn’t mean the forgiveness plan was safe. Hours after the hold lifted on Thursday, officials for Republican-led states, including the Missouri attorney general, Andrew Bailey, began petitioning a Missouri judge to block the plan.
On Thursday evening, US District Judge Matthew Schelp issued a preliminary injunction against the debt relief plan. Bailey released a statement on Thursday supporting Judge Schlep’s decision.
What does this mean for borrowers? First, know that the injunction is temporary until a final decision is made by the courts. For now, it means the Department of Education is unable to grant debt forgiveness under its latest plan. If the plan survives in court, it’s expected to provide student debt relief to an estimated 25 million Americans.
With the fate of student loan debt relief programs uncertain, Rubin suggests borrowers begin preparing for all repayment scenarios. “Borrowers should not make decisions based on the expectation of forgiveness,” she said. “Even if forgiveness is approved, not all borrowers will qualify for forgiveness.”
The Department of Education didn’t immediately respond to a request for comment. We’ll keep you updated as this story unfolds.
