Just one day after a federal judge in Georgia ruled that President Biden’s student loan forgiveness program could move forward, Missouri-based District Judge Matthew Schelp issued a new injunction against the proposed plan.

“Allowing Defendants to eliminate the student loan debt at issue here would prevent this Court, the U.S. Court of Appeals, and the Supreme Court from reviewing this matter on the backend, allowing Defendants’ actions to evade review,” wrote Schelp.

Schelp, a 2020 Trump appointee, must now rule on the forgiveness plan before the Department of Education can implement it. This leaves nearly 30 million student loan borrowers hanging in the balance.

The decision capped off a whirlwind 24 hours for Americans who were eligible for relief under Biden’s proposal.

Their hopes were raised on Wednesday after District Judge Randal Hall allowed a temporary restraining order on the plan to expire. Now, it’s back to square one.

As CNBC reported, Schelp’s decision to block the plan from moving forward was to prevent the Biden administration from moving quickly with loan forgiveness.

The Biden administration has been racing against the clock to finalize the plan’s rules before the November presidential election, in which student loans are an important electoral issue.

As the cost of living crisis continues to bite, millions of Americans are looking to the federal government for a lifeline on their student loan balances.

The financial strain of student debt

By the end of the second quarter, Americans collectively owed more than $1.73 trillion in student loans. According to the Education Data Initiative, the average federal student loan borrower is nearly $38,000 in debt.

A Bankrate survey found that 25% of borrowers had been struggling to afford their monthly payments since last October when the pandemic-era payment pause was lifted. The survey found that 24% of borrowers have skipped at least one payment since then.

A more recent Intuit Credit Karma study found that 20% of student loan borrowers have yet to make a single payment on their loans. Many blamed their lack of payments on inflation and the cost of living crisis.

These survey results are corroborated by government data. A July report from the Government Accountability Office found that nearly 30% of borrowers—close to 10 million people—were past due on their student loan payments as of January 2024.

While many payment dodgers are struggling financially, others are refusing to pay in the hope of securing a government bailout.

Astra Taylor, the co-founder of the Debt Collective advocacy group, called this a “massive student debt strike.”

Experts have warned borrowers that missing payments could have dire consequences.

Like other forms of credit, a failure to make student loan payments in a timely manner will lead to late fees, compound interest and, potentially, a negative credit score.

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