Judge Opens Door for Right-Wing Courts to Launch New Assault on the Administrative State
October 3, 2024 | WASHINGTON, D.C. — A Trump-appointed federal judge in Missouri issued a dangerous decision blocking a student debt relief rule invented by Missouri Attorney General Andrew Bailey while also preventing the Biden-Harris Administration from delivering student debt relief in the future.
The suit challenges the Biden-Harris Administration’s plan to provide relief to tens of millions of struggling borrowers, which was proposed earlier this year, even though it is not yet finalized. Judicial review is typically limited to so-called “final agency actions”; however, in a radical move, a Trump-appointed judge declined to wait for such an action and instead blocked any future debt relief in a three-page opinion without any legal reasoning or justification.
In response, Student Borrower Protection Center (SBPC) Deputy Executive Director and Managing Counsel Persis Yu issued the following statement:
“With a dearth of legal reasoning, today’s decision takes the extraordinary step of blocking a proposed federal student debt relief rule that has yet to be finalized and has never been implemented. This case lacks seriousness and this judge’s order puts our captured courts on full display. With this case, the Missouri Attorney General continues to put naked political interest and corporate greed ahead of student loan borrowers in Missouri and across the country. This is a shameful attack on tens of millions of student loan borrowers and our judicial system as a whole. We will not stop fighting to expose these abuses and 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 have 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.
The Missouri AG originally 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.The lawsuit had unsuccessfully argued that Georgia had standing based upon potential financial harm due to lost tax revenue. Just yesterday, the Georgia judge dismissed the state of Georgia from the case for a lack of standing and transferred it to the Eastern District of Missouri. Missouri claims standing based upon harm to the federal student loan servicer and lender MOHELA.
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, the 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.