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A lawsuit could still stop Biden's student loan relief in it's tracks

AILSA CHANG, HOST:

All right. We have an update now in the legal fight over whether President Biden can erase the federal student loan debts of millions of borrowers. A federal judge in Missouri has dismissed a case filed by six state attorneys general meant to stop Biden's debt relief plan before it could even start.

For more on that decision and the other lawsuits still making their way through the courts, we're joined now by NPR education correspondent Cory Turner. Hey, Cory.

CORY TURNER, BYLINE: Hey, Ailsa.

CHANG: Ok. So let's start with the basics of this Missouri case. Who filed it? Why did they oppose student loan relief?

TURNER: Well, I should say first off, of the handful of lawsuits that have been filed by conservative groups trying to stop Biden's debt relief plan, multiple legal experts told me, Ailsa, this one was probably the strongest. It was filed by six pretty conservative states, including Missouri and Arkansas, which are home to these state-based loan companies that they argued would be hurt by debt cancellation. And that's because these companies or entities still manage some very old federal student loans. And so these state attorneys general said, look, cancelling these loans would mean less profit for these state-based entities.

CHANG: And why was it dismissed? Like, what did the judge say?

TURNER: Well, a few things. So first, that the loan servicer at the center of this case, MOHELA (ph), in Missouri, isn't actually a plaintiff in the case. Missouri is. And the judge said the state attorney general failed to show how the state would be harmed if these old federal loans were actually canceled. Also, the judge pointed out that on the same day these states filed their lawsuit, the ed department actually changed its rules around these loans, saying they no longer qualify for cancellation after all. Now, that reversal infuriated hundreds of thousands of borrowers who still have these old loans. But it now - it's pretty clear it did what the Biden administration hoped it would and made it a lot harder for these plaintiffs to prove they'd been harmed.

CHANG: So then, Cory, where does this dismissal leave the overall legal fight over Biden's debt relief plan?

TURNER: I've heard from a few borrower advocates who were both surprised and obviously thrilled by this dismissal. They also got another win today, Ailsa, from the U.S. Supreme Court. Judge Amy Coney Barrett denied a different challenge to Biden's debt relief plan. It had been filed by a group of Wisconsin taxpayers who said Biden exceeded his legal authority. The problem, though, in all these cases really is before you can even argue whether or not Biden exceeded his authority, the plaintiffs have to show this sort of basic concrete harm from debt relief. And that has turned out to be a very real challenge.

Still, though, with the cases that are still outstanding, it's worth remembering that these conservative legal groups have been pretty thoughtful about where they're filing their lawsuits, hoping they'll get a more sympathetic conservative judge - places like Arizona and Texas. So anything is still possible.

Meanwhile, we should say more than 12 million borrowers have already filled out the ed department's application for debt cancellation. And we know from a document the department filed in this case, it may begin discharging debts as early as Sunday or Monday. So it seems pretty unlikely at this point that a court will intervene before cancellation starts.

CHANG: OK. But if the Department of Education is allowed to start canceling debts, I mean, do the courts have the power to undo that cancellation down the road in the future?

TURNER: Well, I've asked a bunch of legal experts that very question. And their answers ranged from it's not clear to it's highly unlikely because restoring student loans after they'd been erased is not unlike trying to put a sneeze back in your nose.

CHANG: (Laughter) That is NPR's Cory Turner. Thank you so much, Cory.

TURNER: You're welcome, Ailsa. Transcript provided by NPR, Copyright NPR.

Cory Turner reports and edits for the NPR Ed team. He's helped lead several of the team's signature reporting projects, including "The Truth About America's Graduation Rate" (2015), the groundbreaking "School Money" series (2016), "Raising Kings: A Year Of Love And Struggle At Ron Brown College Prep" (2017), and the NPR Life Kit parenting podcast with Sesame Workshop (2019). His year-long investigation with NPR's Chris Arnold, "The Trouble With TEACH Grants" (2018), led the U.S. Department of Education to change the rules of a troubled federal grant program that had unfairly hurt thousands of teachers.