Courts block parts of Biden student loan repayment plan
Two federal judges in Missouri and Kansas halted sections of a Biden administration initiative intended to lower student loan payments, raising questions for the millions of Americans impacted by the program.
In Kansas, Judge Michael Crabtree ruled that the Department of Education can’t enact the full scope of the Saving on a Valuable Education (SAVE) program. Program participants with undergraduate student loan debt were scheduled to see their payments half next month, from 10 percent to 5 percent of their income 225 percent above the poverty line.
Crabtree, an Obama appointee, said the department did not get explicit authority for that portion of the program from Congress.
That challenge was led by Kansas Attorney General Kris Kobach (R) and joined by 11 other Republican states. Crabtree ruled earlier this month that eight of the 12 states did not have standing in the case, leaving only Alaska, Texas and South Carolina.
In Missouri, Judge John Ross—also an Obama appointee—ruled that the Department of Education cannot forgive any loans under SAVE, finding that forgiving federal loans illegally deprives state loan operators of revenue.
Five other states joined Missouri Attorney General Andrew Bailey’s (R) challenge. The argument is the same that the Supreme Court sided with in ruling against President Biden’s initial attempt at mass student loan forgiveness.
“Congress never gave Biden the authority to saddle working Americans with half-a-trillion dollars in other people’s debt. A huge win for the Constitution,” Bailey wrote in a social media post on X.
Ross also remarked that SAVE may be too broad to fit under its Congressional mandate, leaving the door open to future challenges over the entire program’s legality.
SAVE has canceled over $5.5 billion in debt for over 400,000 borrowers since its inception, as Biden attempted to maneuver around the Supreme Court block of his more sizable forgiveness plan. More than 8 million people have enrolled.
The program is Biden’s marquis student loan forgiveness policy, though is separate from efforts to cancel debt of public sector workers and for those defrauded by for-profit schools.
SAVE will continue to operate as the two lawsuits continue to be litigated, though Monday’s ruling effectively freezes the program’s extent and pauses all future loan forgiveness.
Education Secretary Miguel Cardona denounced the rulings in a statement Tuesday.
“The Biden-Harris Administration’s SAVE Plan is the most affordable repayment plan in history,” Cardona said. “But Republican elected officials and special interests sued to block their own constituents from being able to benefit from this plan – even though the Department has relied on the authority under the Higher Education Act three times over the last 30 years to implement income-driven repayment plans.”
“We will continue to provide this long-overdue relief, no matter how many times Republican elected officials and their allies try to stop us,” he added.
Updated at 10:11 a.m. June 25
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