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The Supreme Court on Wednesday declined the Biden’s administration latest student loan debt relief plan. In a brief order, the court denied an emergency request filed by the administration seeking to lift a nationwide injunction imposed by an appeals court.
The justices turned down a request from the Justice Department to lift a sweeping appeals court order that blocked the program (known as the SAVE plan) which has been the subject of legal challenges from more than a dozen GOP-led states in recent months. The Court’s unsigned order said that it “expects that the Court of Appeals will render its decision with appropriate dispatch.” There were no noted dissents.
The Education Department paused loan payments for borrowers enrolled in the program earlier this month because of the ongoing legal proceedings. The Supreme Court struck down the Biden administration’s earlier plan last year that would have benefited more than 40 million Americans and forgiven nearly half-a-trillion-dollars in loans.
The latest program is an income-driven repayment plan in which monthly payments of a loan are based on the borrower’s income. The SAVE plan lowers monthly undergraduate loan payments to 5% of a borrower’s’ discretionary income above 225% of the federal poverty line — up from 150% — and provides for shorter repayment periods and earlier loan forgiveness for borrowers with smaller starting balances. The administration said it had the authority to make these changes under the Higher Education Act and estimated that out of the 8 million borrowers who enrolled in the SAVE Plan, 4.5 million have monthly payments of $0.
The brief unsigned order saw the Court reject the states’ request to lift that appeals court’s stay, noting that “the states said they do not require relief from the Supreme Court as long as the 8th Circuit’s order is in place.” The 8th Circuit’s decision blocks implementation of the program for borrowers nationwide and is at odds with the order from the U.S. Court of Appeals for the 10th Circuit in the dispute involving the three other states, which kept the SAVE plan intact during legal proceedings.
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