A US federal court has issued a preliminary injunction to halt the Department of Education’s revised plan for student debt relief, affecting borrowers in six states: Alabama, Arkansas, Florida, Missouri, North Dakota, and Ohio. This decision came on the final day of a temporary restraining order, which means the injunction could remain effective until a final decision is made on the merits of the case. The lawsuit was initially also joined by the state of Georgia, which was removed due to lack of standing two days prior. More details on the ruling can be found here.
President Biden’s administration has faced legal obstacles in executing its student debt forgiveness initiative, a key aspect of the president’s 2020 campaign. A previous plan, announced in August 2022, was shut down by the US Supreme Court in 2023, which determined that without congressional approval, the policy was beyond the Department of Education’s authority. This previous plan relied on the HEROES Act of 2003, whereas the current initiative draws from Section 423(a)(6) of the Higher Education Act. It authorizes the Secretary of Education to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired.”
The opposition argues that the executive branch is bypassing necessary congressional approval for significant fiscal policies, potentially burdening taxpayers. Meanwhile, the Department of Education asserts it has the proper authority under the Higher Education Act to implement the debt relief plan. Insight into the ongoing challenges faced by the Department of Education can be found here.
This injunction, along with the US Supreme Court’s earlier refusal to reinstate the SAVE loan initiative, ensures that the legal arguments will now proceed before the US District Court for the Eastern District of Missouri. Future decisions by this court are subject to potential review by appellate courts and the US Supreme Court. The full story on these developments is available on JURIST.