US judges block parts of Biden's student loan relief plan
Send a link to a friend
[June 25, 2024]
By Nate Raymond
(Reuters) -Two federal judges in Kansas and Missouri on Monday at the
urging of several Republican-led states blocked President Joe Biden's
administration from further implementing a new student debt relief plan
that lowers payments.
U.S. District Judge Daniel Crabtree in Wichita, Kansas, blocked the U.S.
Department of Education from implementing parts of a student loan
repayment plan not already in effect that cuts borrowers' monthly
payments and provides a faster path to have debts forgiven.
He ruled shortly before U.S. District Judge John Ross in St. Louis,
Missouri, issued a preliminary injunction barring the department from
granting further loan forgiveness under the administration's Saving on a
Valuable Education (SAVE) Plan.
The SAVE plan provides more generous terms than past income-based
repayment plans, lowering monthly payments for eligible borrowers and
allowing those whose original principal balances were $12,000 or less to
have their debt forgiven after 10 years.
![](http://archives.lincolndailynews.com/2024/Jun/25/images/ads/current/heritagepackaging_sda_HEROES_2024.png)
Missouri Attorney General Andrew Bailey, a Republican who helped lead
the litigation, hailed Ross' decision. "Congress never gave Biden the
authority to saddle working Americans with half-a-trillion dollars in
other people's debt," he wrote on social media platform X.
The White House said it strongly disagreed with the rulings and
criticized Republican elected officials who have fought against student
debt forgiveness.
"Today's rulings won't stop our administration from using every tool
available to give students and borrowers the relief they need," White
House Press Secretary Karine Jean-Pierre said in a statement.
Biden, a Democrat, announced the SAVE Plan in 2022, alongside a broader
$430 billion program that would have fulfilled a campaign promise by
cancelling up to $20,000 in debt for up to 43 million Americans. It was
ultimately blocked by the conservative- majority U.S. Supreme Court in
June 2023.
The SAVE Plan was slated to fully take effect on July 1, though parts of
it already been implemented, with 414,000 borrowers by mid-May having
been granted $5.5 billion in debt relief, according to the Education
Department.
[to top of second column]
|
![](../images/062524PIX/news_r42.jpg)
A sign calling for student loan debt relief is seen in front of the
Supreme Court as the justices are scheduled to hear oral arguments
in two cases involving President Joe Biden's bid to reinstate his
plan to cancel billions of dollars in student debt in Washington,
U.S., February 28, 2023. REUTERS/Nathan Howard/File Photo
![](http://archives.lincolndailynews.com/2024/Jun/25/images/ads/current/graue_lda_ENVISION3257_061024.jpg)
The White House has said that over 20 million borrowers could
benefit from the SAVE Plan. The administration in May said that 8
million are already enrolled, including 4.6 million whose monthly
payments have been reduced to $0.
Eleven states challenged the plan in a lawsuit in Kansas. Crabtree
had recently dismissed eight of the states' claims, but allowed
South Carolina, Texas and Alaska to push forward. Seven other states
sued in Missouri.
Neither judge on Monday ordered any debt relief already granted
unwound. Crabtree said the Republican-led states waited too long to
sue to claim they were being irreparably harmed by the in-effect
aspects of the SAVE Plan.
But Crabtree, who like Ross was appointed by Democratic former
President Barack Obama, said the Higher Education Act of 1965 did
not clearly authorize the type of "unprecedented and dramatic
expansion" of income-based repayment plans envisioned.
He cited an estimate by lawyers for the Republican-led states of
South Carolina, Texas and Alaska that the SAVE Plan would carry a
price tag of $475 billion over 10 years.
Ross, ruling in favor of seven states led by Missouri, reached a
similar conclusion in finding the department "overstepped its
authority by promulgating a loan forgiveness provision as part of
the SAVE program."
(Reporting by Nate Raymond in Boston; Editing by Leslie Adler and
David Gregorio and Miral Fahmy)
[© 2024 Thomson Reuters. All rights reserved.]This material
may not be published, broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2024/Jun/25/images/ads/current/dreamteammow_sda_060324.png) |