- A federal judge in Georgia declined to block Biden's second attempt at broader debt relief.
- Instead, the judge ordered the case to be transferred to a federal court in Missouri.
- It could signal a lifeline for 30 million borrowers waiting for student-loan forgiveness.
Millions of student-loan borrowers waiting for debt relief may have just been handed a lifeline.
On Wednesday, Georgia federal Judge Randal Hall declined to block President Joe Biden's plan to cancel student debt under the Higher Education Act of 1965, responding to a lawsuit from a group of GOP state attorneys general who sought to stop the implementation of the relief.
Instead, Hall ruled that Georgia was the improper venue to file the lawsuit — and he's transferring the case to the to the federal eastern district of Missouri. Missouri's attorney general was among the plaintiffs who filed the lawsuit, and the case argued that student-loan company MOHELA — which is overseen by Missouri's state government — would suffer revenue loss from any form of debt relief.
The Supreme Court previously struck down Biden's first attempt at broad debt relief after finding Missouri had standing to sue given the harm MOHELA would suffer, and Hall said in his decision that the situation is the same with Biden's second attempt: the states have "clear standing" given potential injuries to MOHELA, and the case is best fit to be handled in Missouri.
"The Court finds transfer in the interest of justice, instead of dismissal, because based on the Supreme Court's ruling in Biden, one plaintiff with standing is sufficient for a suit to proceed," Hall said.
An Education Department spokesperson told Business Insider in a statement that "while we appreciate the District Court's acknowledgement that this case has no legal basis to be brought in Georgia, 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."
So far, there has been a temporary restraining order on the relief — meaning the department could not move forward with implementation — and it's unclear if the transfer of the case would allow relief to move forward.
Still, some advocates lauded the decision as a win for borrowers. Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center, said in a statement that Hall's decision is "a small victory for democracy."
"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," she said.