U.S. Supreme Court Declines to Reinstate Biden’s Student Loan Repayment Plan

 

On Wednesday, the U.S. Supreme Court declined to reinstate the Biden administration’s ambitious Save plan, which sought to reduce monthly student loan payments for millions of borrowers. The plan, worth billions of dollars, remains blocked following a legal challenge by several Republican-led states.

The Supreme Court issued an unsigned order with no noted dissents, stating that it “expects that the court of appeals will render its decision with appropriate dispatch.” The decision does not immediately affect the approximately 8 million borrowers currently enrolled in the program.

The legal battle over the Save plan began when U.S. District Judge John Ross in St. Louis issued a preliminary injunction in June, temporarily halting the provision that would have granted loan forgiveness to certain borrowers. On August 9, the U.S. Court of Appeals for the Eighth Circuit in St. Louis extended the block to the entire debt relief plan, prompting the Biden administration to file an emergency appeal to the Supreme Court.

The Biden administration has expressed strong disagreement with the Eighth Circuit's ruling. Miguel Cardona, the U.S. Secretary of Education, criticized the decision, stating it would burden millions of borrowers with additional monthly costs. "This ruling forces millions of borrowers to pay hundreds of dollars more each month," Cardona said.

Meanwhile, a separate legal challenge against the administration's student debt relief program, led by another group of Republican states, is still pending in the 10th U.S. Circuit Court of Appeals in Denver.

The Save plan was designed to ease the burden on borrowers by lowering their monthly payments. Under the proposal, those who originally took out federal loans of $12,000 or less would see their remaining debt forgiven after 10 years of repayment.

However, several Republican states have accused the Biden administration of overstepping its authority by changing repayment terms and wiping out loans without congressional approval.

In defense, lawyers for the Biden administration argued that the Eighth Circuit’s injunction has created chaos in managing the loans of millions of borrowers. “The eighth circuit’s injunction has severely harmed millions of borrowers and the department by blocking long-planned changes and creating widespread confusion and uncertainty,” they stated.

The Supreme Court's decision leaves the future of the Save plan uncertain, with millions of borrowers caught in the middle as legal battles continue to unfold.