Supreme Court says no to un-blocking Biden's SAVE student loan forgiveness plan
The massive Saving on a Valuable Education student loan plan will remain on hold, after President Biden had asked the high court to bypass lawsuit challenges that are making their way through the lower courts.
After President Joe Biden filed an emergency appeal earlier this month, asking the Supreme Court to reinstate his sweeping Saving on a Valuable Education student loan forgiveness program, the high court declined to revive the SAVE plan on Wednesday, leaving 8 million borrowers in limbo.
The justices rejected the Biden administration’s request to temporarily lift a lower-court ruling that temporarily blocked the student loan program from moving forward. However, it is not a final ruling on the SAVE program and the legality of the plan could ultimately return to the high court, after making their way through lower courts.
The Supreme Court expects that the Court of Appeals will render its decision “with appropriate dispatch,” read one of the Court’s orders declining to take up the pending cases.
Earlier this year, 18 Republican-led states have joined one of two lawsuits challenging the administration’s SAVE plan., contending Biden doesn’t have the legal authority to implement the plan, referring to the similarities to the original student loan plan that was rejected by the Supreme Court in 2023.
In addition, the states countered that the Biden administration would need approval from Congress to implement the program, which they estimated would cost $475 billion.
Under the income-driven repayment SAVE 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.
More than 8 million borrowers had already been enrolled in the SAVE plan when it was paused by the lower courts, and the Education Department was ready to cancel $5.5 billion of debt for 414,000 borrowers.
The SAVE plan also would forgive debt for borrowers in public service for 10 years who have made 120 months of qualifying payments.
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 strikes down Biden’s $10,000 student loan forgiveness plan
It’s unclear when lower courts will issue their final rulings on whether or not the SAVE plan should be overturned, though it’s likely the issue will go back to the Supreme Court once it does.