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Biden’s student loan cancellation can easily move forward
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Biden’s student loan cancellation can easily move forward

WASHINGTON (AP) — President Joe Biden last attempt Student loan cancellation is free to proceed – at least temporarily – after a Georgia judge ruled that a legal challenge should be handled by a Missouri court.

Biden’s plan has been on hold since September after seven Republican-led states challenged it in federal court in Georgia. But on Wednesday, a federal judge decided not to extend the pause and instead dismissed Georgia from the lawsuit, citing a lack of legal standing or standing.

U.S. District Court Judge J. Randal Hall decided to move the lawsuit to Missouri, one of the remaining states in the case. On Thursday, those states filed a motion with the Missouri court to block the plan.

Without a new obstacle, the Biden administration could apply pressure the suggestion already on Friday towards the finish line. The Education Department is free to issue a rule paving the way for cancellation, although implementation would likely take days or weeks.

Biden’s plan would forgive at least some of their student loan debt for an estimated 30 million borrowers.

This would eliminate up to $20,000 in interest for those whose original balances have increased due to out-of-control interest rates. It would also provide relief for those who have been paying off their loans for 20 or 25 years and those who attended college programs where graduate debt is high relative to their income.

Biden called on the Education Department to seek repeal through a federal rulemaking process after the Supreme Court rejected an earlier plan use another legal basis. This plan would have saved up to $20,000 for 43 million Americans.

The Supreme Court rejected Biden’s first proposal in an opinion Case filed by Republican states including Missouri, which is now taking the lead in the latest lawsuit.

In his order Wednesday, Hall said Georgia had failed to demonstrate that it had been significantly harmed by Biden’s new plan. He rejected the argument that the policy would hurt the state’s income tax revenue, but concluded that Missouri had “clear standing.”

Missouri is suing on behalf of MOHELA, a state-created student loan servicer contracted by the federal government to help collect student loans. In the lawsuit, Missouri argues that the termination would hurt MOHELA’s revenue because the payment is based on the number of borrowers the company serves.

In their lawsuit, the Republican states argue that the Education Department tacitly told loan servicers to prepare for loan cancellations as early as Sept. 9, avoiding the typical 60-day waiting period for new federal regulations to take effect.

The courts are now urging the Missouri court to act quickly, saying the Department of Education could “illegally cancel hundreds of billions of dollars in student loans en masse as early as Monday.”

Alabama, Arkansas, Florida, North Dakota and Ohio also join the lawsuit.

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Associated Press education coverage receives funding from several private foundations. AP is solely responsible for all content. Find APs Standards for work with charities, a list of supporters and funded coverage areas at AP.org.

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