A federal judge has temporarily halted President Joe Biden's latest student loan forgiveness plan, affecting over 25 million borrowers, as part of an ongoing GOP-led challenge to the program.
The restraining order was issued by U.S. District Judge J. Randal Hall in Augusta, Georgia, after seven Republican-led states filed a lawsuit aiming to stop the plan.
The states, led by Missouri, claim the Biden administration lacks the authority to forgive student loans under the proposed rule, which was set to cancel billions in debt.
In his decision, Hall wrote that the states had a "substantial likelihood of success" in proving the Education Department overstepped its legal boundaries. "... This is especially true in light of the recent rulings across the country striking down similar federal student loan forgiveness plans."
The lawsuit, filed earlier this week, argued the Education Department had begun instructing loan servicers to cancel debts before the rule was finalized, potentially forgiving $73 billion in loans. Hall's ruling pauses the policy until a hearing scheduled for Sept. 18.
In a statement to Reuters, the White House criticized the ruling, calling it "an overreach based on false claims fueled by Republican elected officials."
This lawsuit marks the latest legal challenge to Biden's efforts to provide debt relief. Previously, the Supreme Court blocked a $430 billion forgiveness plan in June 2023, leading the administration to pursue a new program, the Saving on a Valuable Education (SAVE) plan, which aimed to reduce monthly payments and accelerate loan forgiveness. However, that plan is also on hold due to ongoing litigation.
This most recent case will move forward with a hearing later this month.
