Student loan 'bailouts': 17 states file 2 lawsuits to block Biden’s SAVE plan

The Biden administration’s plans to cancel student loan debt continue to pile up – and so do lawsuits attempting to stop them.

Eighteen Republican-led states have joined one of two lawsuits challenging the administration’s Saving on a Valuable Education (SAVE) plan. Under the plan, borrowers who originally took out $12,000 or less in loans and have been in repayment for 10 years are eligible to have their remaining debt canceled. The SAVE plan also would forgive debt for borrowers in public service for 10 years who have made 120 months of qualifying payments.

“President Biden does not have the authority to erase student debt without express congressional approval,” a spokesperson for Missouri Attorney General Andrew Bailey told “The College Fix.” “AG Bailey swore an oath to uphold our Constitution, so he filed suit to do exactly that in this instance. Every American, including Missouri taxpayers, benefit from that.”

Missouri is joined in the lawsuit by Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.

The second lawsuit, filed by Kansas, Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina and Texas, argues that the last time the Biden administration wiped out student loan debt administratively, the Supreme Court ruled it was unlawful.

“Nothing since then has changed,” the suit said. “Biden openly boasted about his defiance of the Supreme Court with this move, stating in Jacksonian fashion, ‘The Supreme Court blocked it. They blocked it. But that didn’t stop me.’ This lawsuit is now necessary to prevent defendants from continuing to flout the law, which includes ignoring Supreme Court decisions.”

The U.S. Department of Education defended the legality of the SAVE plan.

“The department does not comment on pending litigation,” it said. “However, Congress gave the U.S. Department of Education the authority to define the terms of income-driven repayment plans in 1993, and the SAVE plan is the fourth time the department has used that authority. The Biden-Harris administration won’t stop fighting to provide support and relief to borrowers across the country, no matter how many times Republican elected officials try to stop us.”

Related: Biden cancels yet another $7.4B of student debt for 277,000 borrowers

Student loan bailouts were a key 2020 election promise from Biden, but the Supreme Court in June 2023 struck down his administration’s initial attempt in Biden v. Nebraska, ruling that the HEROES Act did not grant him the authority to cancel $430 billion-plus of student loan principal. Soon after the decision was handed down, however, Biden announced the new student debt loan forgiveness plan.

According to the administration, the SAVE plan is aimed at providing relief to Americans borrowers with large amounts of accrued interest, those who have made timely loan payments for a number of years and former students at higher education programs deemed to be of “low financial value.” Unless the courts grant an injunction to prevent the SAVE plan from being implemented, loan relief will take effect on July 1, according to the lawsuits.