Judge Blocks Biden’s Proposed Plan B Student Loan Forgiveness Program
A federal judge has issued a temporary injunction on President Biden’s student debt relief plan, also known as “Plan B.” The complaint
against the plan was filed by seven states with Republican governors—Missouri, Georgia, Alabama, Arkansas, Florida, North Dakota and Ohio. This legal action comes after the Supreme Court previously upheld a similar hold on the Saving on a Valuable Education (SAVE) program, a key part of Biden’s strategy to alleviate student debt.
Plan B would have provided debt relief for up to 27 million borrowers, specifically targeting those with longstanding loans that have accumulated significant interest over time. The program would forgive the full amount of interest borrowers have accrued, provided they earn less than $120,000 as single borrowers or $240,000 as married couples and are enrolled in an income-driven repayment plan. Another provision permits a one-time, automatic cancellation of up to $20,000 in accrued interest for borrowers, regardless of income. Additionally, borrowers with outstanding undergraduate debt that is at least 20 years old, or graduate debt that is 25 years old, would also see their balances automatically forgiven under the rule.
The states allege that the administration is exceeding its authority and illegally preparing to forgive loans before the rule is even in effect, per an internal memo obtained by the states. The legal challenge highlights allegations that the Department of Education’s (ED) new rule was crafted with a strategic rollout designed to forgive substantial amounts of debt intended to benefit the Democratic presidential candidate ahead of the upcoming election.
Though the rule at issue is only a proposed rule (not a finalized rule), Judge J. Randal Hall of the Southern District of Georgia justified the temporary restraining order by noting that the states demonstrated a potential overreach of the ED's authority. This decision temporarily halts the program’s implementation while the legal disputes are resolved.
The administration plans to continue defending the program in court.