The plan of student loan forgiveness of the Biden administration was temporarily blocked again Thursday by a Missouri judge, just a day after a federal judge in Georgia announced he would let an order restricting the relief program expire.
St. Louis-based US District Judge Matthew Schelp, appointed by former Republican President Donald Trump, issued the latest preliminary order against Biden’s relief plan.
As a result of the order, the US Department of Education is again prohibited from forgiving people’s student loans until Schelp has a chance to decide the case.
The latest order limited the 24 hours during which federal student loan holders were subjected to a judicial whiplash, as a lawsuit challenging Biden’s relief package, brought by seven GOP-led states, bounced out of the courts. from Georgia to those of Missouri.
The states that filed the lawsuit (Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio) allege that the US Department of Education’s new debt cancellation effort is illegal.
On Wednesday, Georgia District Judge Randal Hall determined that his state lacked of standing to sue against the relief plan and, therefore, his court could not host the case.
Hall ordered the case transferred to Missouri, because the states claim Biden’s plan would further harm student loan servicer Mohela, or the Missouri Higher Education Loan Authority.
When CNBC broke the news Thursday that the restraining order would expire, consumer and borrower advocates expected the Biden administration would try to move quickly with its loan forgiveness plan for tens of millions of Americans. The Department of Education has already prepared its loan servicers to begin reducing and eliminating people’s debt.
However, Schelp cited this possibility as precisely the reason for delaying the decision while analyzing the case.
“Allowing the defendants to discharge the student loan debt at issue here would prevent this Court, the United States Court of Appeals, and the Supreme Court from reviewing this matter in its entirety, allowing the defendants’ actions to evade review.” ”Schelp wrote.
It is article was originally published in English by Annie Nova for our sister chain CNBC.com. For more from CNBC enter here.
