Biden’s SAVE student loan repayment plan blocked by federal appeals court
President Biden’s signature SAVE student loan program is now on hold, as GOP states are asking the Supreme Court to completely block the program.
On June 24, two federal judges, in Missouri and Kansas, halted parts of Biden’s SAVE student loan repayment plan, which had been set to begin July 1. Thursday’s ruling is the latest development in legal battles over the SAVE program, as three GOP states – Texas, South Carolina and Alaska –
asked the Supreme Court to block Biden’s SAVE program in an emergency filing last week.
This latest appeals court ruling will prohibit the Education Department from moving ahead with major provisions of the SAVE program – essentially prohibiting the administration from implementing the parts of the SAVE plan that were not already blocked by lower courts. Republicans have argued that the program far exceeds the administration’s legal authority and that President Biden was overstepping his executive action without approval from Congress.
In June, two injunctions handed down by federal judges put the SAVE program on hold:
- In the Missouri ruling, District Judge John Ross of the Eastern District blocked the Education Department from carrying out “ any further loan forgiveness for borrowers” under the SAVE program until he decides the full case. He agreed that the program illegally deprives state loan operators of revenue. SAVE would harm Missouri, he said, because it would reduce the fees that the Education Department pays to the Missouri Higher Education Assistance Agency, the same entity at the center of the Supreme Court’s case over Biden’s first student debt relief program.
- In the Kansas ruling, District Judge Daniel Crabtree blocked the Education Department from implementing a part of the SAVE program that would lower some borrower’s monthly payments. However, he declined to block the entirety of the program, citing concerns about unwinding the parts of the program that have already been implemented.
Related: “Supreme Court must block Biden’s student loan plan’: States file emergency petition
As a result of this latest ruling, an Education Department spokesperson said in a statement that the agency will continue to “aggressively defend the SAVE plan … We are assessing the impacts of this ruling and will be in touch directly with borrowers with any impacts that affect them.”