The judge transferred the case to the Eastern District of Missouri, where Missouri’s claims will continue to be heard.
The Biden administration’s latest student loan forgiveness plan can now proceed, after a federal judge declined to renew a temporary restraining order that had blocked the program. The judge also dismissed part of the lawsuit challenging the initiative in Georgia and transferred the case to Missouri.
U.S. District Judge J. Randal Hall, who issued the initial restraining order on Sept. 5, preventing the Department of Education from implementing the student loan forgiveness plan, issued an order on Oct. 2 that does not extend the freeze past its scheduled Oct. 3 expiration date.
This decision permits the Biden administration to move forward with its student loan forgiveness efforts while the legal battle continues.
The judge also dismissed the state of Georgia from the lawsuit, citing a lack of standing. The case, originally brought by a coalition of seven Republican-led states, including Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio, challenges the legality of the Biden administration’s debt cancellation program. However, the judge determined that Georgia’s claims of financial harm were speculative and self-inflicted, based on how its state tax laws are linked to federal tax policy.
In his ruling, the judge explained that Georgia had failed to demonstrate the kind of concrete injury required to proceed with the lawsuit, stating that any potential loss of tax revenue resulting from the loan forgiveness plan was “too speculative” and the result of decisions made by the state’s own legislature.
“Any alleged injury that may result from a loss of state income-tax revenue was self-inflicted by Georgia’s laws and is insufficient to establish standing,” Hall wrote.
With Georgia dismissed, the judge transferred the case to the Eastern District of Missouri, where Missouri’s claims will continue to be heard. The judge found that Missouri, which houses the Higher Education Loan Authority of the State of Missouri, has a more direct stake in the outcome of the lawsuit, as loan services could suffer financial harm due to the loan cancellations.
The Epoch Times has reached out to the Georgia Attorney General’s office with a request for comment on the ruling.
The temporary restraining order issued by Hall on Sept. 5, and extended on Sept. 19 by another 14 days to Oct. 3, temporarily blocked the Department of Education from implementing the loan forgiveness program, dubbed the “Third Mass Cancellation Rule,” while the court evaluated the legal arguments.
Hall’s decision on Oct. 2 to dismiss Georgia from the case and not extend the temporary restraining order means that the block on the Biden administration’s plan has been lifted, at least temporarily.
It’s unclear whether the plaintiffs in Missouri will seek another temporary restraining order or preliminary injunction to block the program.
The lawsuit, originally filed on Sept. 3 in the U.S. District Court for the Southern District of Georgia, names Secretary of Education Miguel Cardona, the Department of Education, and President Joe Biden as defendants. The seven states allege that Cardona is “unlawfully trying to mass cancel hundreds of billions of dollars” in student loans and has “quietly” instructed federal contractors to start the cancellation process.
The plaintiffs further claimed that the cost of the loan cancellation program that Hall has now unblocked could reach $146.9 billion, adding to the $475 billion estimated cost of the Saving on a Valuable Education (SAVE) program that Cardona first proposed in August 2022.
“This is the third time the Secretary has unlawfully tried to mass cancel hundreds of billions of dollars in loans,“ the states’ complaint reads. ”Courts stopped him the first two times, when he tried to do so openly. So now he is trying to do so through cloak and dagger.”
The lawsuit alleges that Cardona’s third attempt at loan forgiveness is both the most aggressive and the least legally defensible, arguing that this move bypasses legal requirements, such as the 60-day public notice rule.
The Biden administration’s first attempt to cancel student loans was blocked when the U.S. Supreme Court ruled against using the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act to authorize debt forgiveness.
A second attempt, related to the SAVE Plan, was halted by an Aug. 9 decision of the U.S. Court of Appeals for the Eighth Circuit, which the Supreme Court declined to overturn later in August.
The Department of Education did not respond to The Epoch Times’ prior request for comment on the lawsuit.