Supreme Court Won’t Lift Injunction on Biden Loan Forgiveness Plan

The Supreme Court has once again dealt a blow to the Biden administration’s efforts to provide student loan debt relief, refusing to reinstate the latest plan.

At a Glance

The Supreme Court declined to lift a nationwide injunction on Biden’s student loan debt plan
This decision affects the SAVE plan, which would cap undergraduate loan repayments at 5% of income
Conservative-leaning states, led by Missouri, are challenging the plan’s legality
The administration argues the changes are allowed under a 1993 federal law
This setback follows the Court’s previous ruling against Biden’s attempt to cancel up to $400 billion in student loans

Supreme Court Declines to Revive Biden’s Latest Student Loan Relief Plan

In a significant setback for the Biden administration, the Supreme Court has refused to reinstate the latest student loan debt relief plan. This decision maintains the nationwide injunction on the Saving on a Valuable Education (SAVE) plan, which the Education Department finalized in July 2023 after the Court blocked an earlier loan forgiveness program.

The SAVE plan, touted by the administration as “the most affordable student loan repayment plan ever,” aims to cap undergraduate loan repayments at 5% of income, down from the previous 10%. However, conservative-leaning states, spearheaded by Missouri, have challenged the plan’s legality, arguing that Congress did not authorize such sweeping measures.

BREAKING: The Supreme Court declines to reinstate the Biden administration's latest student loan forgiveness plan for now. https://t.co/yzQWFCDxhD

— CBS Evening News (@CBSEveningNews) August 28, 2024

Legal Challenges and Constitutional Concerns

The challengers to the SAVE plan argue that it would require unauthorized spending of up to $475 billion. This argument invokes the “major questions” doctrine, which requires express Congressional authorization for significant economic policies. Missouri Attorney General Andrew Bailey emphasized this point in a statement following the Court’s decision.

“This court order is a stark reminder to the Biden-Harris administration that Congress did not grant them the authority to saddle working Americans with $500 billion in someone else’s Ivy League debt,” Missouri Attorney General Andrew Bailey said in a statement. “This is a huge win for every American who still believes in paying their own way.”

The administration, through Solicitor General Elizabeth Prelogar, contends that the changes are permissible under a 1993 federal law.

Impact on Borrowers and Political Implications

This latest setback affects approximately 8 million people already enrolled in the SAVE plan. It also puts pressure on President Joe Biden to fulfill his campaign promise of student debt relief as he begins his re-election campaign. The issue of student loan debt, which affects over 10% of Americans, remains a significant concern for young voters.

“We are disappointed in this decision, particularly because lifting the injunction would have allowed for lower payments and other benefits for borrowers across the country,” the spokesperson said in a statement. “The Department will work to minimize further harm and disruption to borrowers as we await a final decision from the Eighth Circuit.”

Despite these setbacks, the Biden administration has approved nearly $150 billion in relief for close to five million people, primarily through executive actions. However, the scale and legality of these efforts continue to face scrutiny and legal challenges.

Looking Ahead

The Supreme Court’s order indicated that the appeals court currently handling the case should “render its decision with appropriate dispatch.” This suggests that while the SAVE plan remains blocked for now, there may be further developments in the near future as the legal battle continues.

As the debate over student loan forgiveness rages on, it’s clear that this issue will remain at the forefront of political discourse. The outcome of this legal battle will have far-reaching implications for millions of Americans struggling with student debt and could significantly impact the upcoming election cycle.