October 3, 2024 | WASHINGTON, D.C. — A Republican-appointed federal judge in Georgia rebuffed the Missouri Attorney General (AG) Andrew Bailey’s attempt to blatantly forum shop his baseless lawsuit. The suit challenges the Biden-Harris Administration’s future plan to provide relief to tens of millions of struggling borrowers. The judge found that there was no evidence of harm to the state of Georgia, and thus, the case did not belong in the Georgia court. The Missouri AG was asking the court to take the extraordinary step of blocking a proposed federal student debt relief rule that has yet to be finalized, temporarily halting any potential future debt cancellation.
In response, Student Borrower Protection Center (SBPC) Deputy Executive Director and Managing Counsel Persis Yu issued the following statement:
“Today’s legal decision is a small victory for democracy. This case by the Missouri AG is as absurd as it is dangerous. The Biden-Harris Administration’s Plan B is both legal and necessary to bring vital relief to over 30 million Americans trapped in a cycle of unaffordable debt. The decision to file this case in the Brunswick Division of the Southern District of Georgia— a carefully chosen court with a single Republican-appointed judge—was a clear and desperate move to undermine democracy and stack the odds against working families.
“However, this case is far from over. This case is the third attempt by the Missouri AG to undermine relief for borrowers and ensure maximum profits for the federal student loan servicing company MOHELA. It reveals a clear intent to rig the system against working families. The Administration must not grant the Missouri AG the power to challenge any decision he opposes and must immediately ensure borrowers get the relief they deserve.”
Background
On September 3, 2024, seven states, led by Missouri Attorney General (AG) Andrew Bailey, sued to block the Biden-Harris Administration’s “Plan B” student loan debt relief plan in a Georgia district court. The student debt relief proposals in question are not yet finalized but aim to help borrowers who have been unable to access existing relief programs and have been trapped in unaffordable debt as a result. When implemented, the package would provide relief for over 30 million Americans, including:
- Borrowers eligible for debt relief under an Income-Driven Repayment plan, Public Service Loan Forgiveness, or other relief programs but who are not enrolled;
- Borrowers crushed by runaway interest;
- Borrowers who’ve been stuck in repayment for over 20 years; and
- Borrowers who have attended low-value programs or schools.
These rules were proposed by the U.S. Department of Education (ED) in April 2024. The Administration conducted a notice and comment process as required by the Administrative Procedures Act and has been in the process of finalizing the rule over the last several months.
Missouri Attorney General Andrew Bailey, who led the suit, opted to bypass Missouri courts and instead file the lawsuit in the Southern District of Georgia, Brunswick Division, where only a single Republican-appointed judge presides. It claims standing based upon harm to the federal student loan servicer and lender MOHELA. The lawsuit had argued that Georgia had standing based upon potential financial harm due to lost tax revenue.
Federal judges are required to identify a “final agency action” to trigger judicial review—conditions that are absent in this case. This is the third lawsuit by the Missouri Attorney General to stop the Biden-Harris Administration from providing relief to student loan borrowers. Earlier this summer, the 8th Circuit issued an order temporarily blocking—in its entirety—a different debt relief program, Biden-Harris Administration’s SAVE Plan. The order also blocked aspects of other long-standing Income-Driven Repayment plans on which millions of borrowers rely.
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.