Georgia federal judge allows Biden student loan forgiveness plan to move forward

Oct. 3 (UPI) -- A federal judge in Georgia ruled to allow President Joe Biden's latest effort to provide broad student debt forgiveness to move forward.

U.S. District Judge J. Randal Hall originally let a restraining order he originally put in place last month to expire after seven states led by Republican governors filed a lawsuit, saying that Biden's latest plan that would affect more than 25 million student borrowers was an overreach by the White House.

Hall late Wednesday dismissed Georgia from the lawsuit, saying it did not show sufficient harm, leaving Alabama, Arkansas, Florida, Missouri, North Dakota and Ohio as the plaintiffs. Those states have argued that providing such forgiveness would court their taxpayers and state coffers.

He suggested that the case be transferred to the Eastern District of Missouri, where that state's attorney general has built its case on harm to the quasi-state Missouri Higher Education Loan Authority, or MOHELA.

The plan, which could be finalized this fall, would provide student loan forgiveness to borrowers the Education Department said have been shut out of existing loan forgiveness plans or saddled with unaffordable debt.

A spokesperson for the Education Department told CNBC that it welcomed the judge's ruling, while criticizing Republicans for trying to block the student debt forgiveness.

"The fact remains that this lawsuit reflects an ongoing effort by Republican elected officials who want to prevent millions of their own constituents from getting breathing room on their student loans," the Education Department said.

The U.S. Supreme Court struck down a grander Biden plan to provide loan forgiveness to 40 million borrowers in 2023. Since then, the White House has modified its loan forgiveness plan to much smaller chunks and abandoned a strategy to use COVID-19-era emergency rules.