The Biden administration did not expedite student loan relief before the final rule, according to an official.

• The Biden administration official stated that the Department of Education did not attempt to forgive student debt for up to 25 million Americans prior to issuing the final rule on the program.
• A federal judge in Georgia temporarily blocked President Joe Biden's new student loan forgiveness plan last week, following the lead of seven Republican attorneys general who argued that the Department of Education was attempting to secretly implement the plan before the rule was officially issued in October.
• Up to $147 billion in federal loans for higher education students could be forgiven under the plan.

Despite claims by seven Republican state attorneys general, a senior Biden administration official confirms that the U.S. Department of Education did not plan to start forgiving up to $147 billion in student debt for as many as 25 million Americans until a final rule on the program was published.

Last week, a judge in Georgia temporarily blocked President Biden's new student loan forgiveness plan, citing claims by AGs that the Department of Education was secretly implementing the plan before the final rule was issued in October.

The Education Secretary, Miguel Cardona, was accused by AGs in a lawsuit of secretly instructing loan servicing companies to cancel loans starting this week, which would be in violation of regulations that mandate the release of the final rule first.

The Department of Education instructed loan servicers to prepare for debt cancellation, according to a Biden administration official who spoke to CNBC.

The official stated that we will not implement a rule until it's finalized.

A source close to the loan industry informed CNBC that the DOE instructed servicers to prepare for the debt relief program.

The preparations involved briefing customer service agents on how to explain the aid to borrowers and drafting new website information.

"The preparatory work is crucial for any product launch, as the source stated."

The source stated that servicers have not been provided with files to forgive.

The Missouri Attorney General's Office, one of the plaintiffs in the suit, has evidence to the contrary, which was filed under seal.

"The spokesman stated that the document remains sealed until the Department grants permission to unseal it. It is concerning that the Department has not yet agreed to release this evidence to the public."

The third Biden administration initiative to relieve student debt has been halted due to legal obstacles from Republican-led lawsuits.

In June 2023, the Supreme Court declared that the administration's initial effort to eliminate up to $400 billion in student debt without Congress's prior approval was unconstitutional.

Recently, a federal appeals court put a temporary hold on Biden's affordable student loan repayment plan, known as SAVE. Some Republican-led states contended that the Department of Education was attempting to circumvent student debt forgiveness through SAVE following the Supreme Court's ruling.

The seven states in their lawsuit against the Biden administration's loan forgiveness plan argue that it violates the U.S. Constitution's separation of powers by seeking to cancel billions of dollars in debt without congressional approval.

Besides Missouri, the states that filed the lawsuit are Alabama, Arkansas, Florida, Georgia, North Dakota, and Ohio.

On Thursday, U.S. District Judge Randal Hall wrote that the AGs "have obtained documents revealing the Secretary is implementing this forgiveness plan without publication and has been set on doing so since May."

The states have a high chance of winning their lawsuit because the Secretary's effort to enforce a rule that deviates from standard practices is likely to be unsuccessful.

Hall scheduled a hearing next week on the lawsuit.

A higher education expert, Mark Kantrowitz, informed CNBC that it is typical for executive branch agencies to take measures in anticipation of new regulations.

"Kantrowitz stated that "Preparatory work does not violate the law" and "Forgiveness cannot occur before the rule is final.""

Even if Hall determines that the Biden administration did not breach the regulatory process timeline, he may still strike down the debt relief plan on constitutional or other grounds.

Concerns were raised by consumer and legal advocates regarding the speed at which Hall agreed with the states' assertion that the Biden administration was hastily pushing the plan.

Conservative judges now have more freedom to make decisions without being based on sound principles or precedent, according to Luke Herrine, an assistant professor of law at the University of Alabama.