US judges block parts of Biden’s student loan relief program By Reuters
Written 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 proceeding with a new student loan relief program that lowers payments.
US District Judge Daniel Crabtree in Wichita, Kansas, has blocked the US Department of Education from implementing parts of an already defunct student loan repayment program that lowers borrowers’ monthly payments and provides a faster way to have loans forgiven.
He issued the ruling shortly before US District Judge John Ross in St. Louis, Missouri, issued the first order barring the department from granting additional loan forgiveness under the administration’s Savings in Education Value (SAVE) program.
The SAVE program offers more generous terms than previous credit-based repayment plans, lowering monthly payments for qualified borrowers and allowing those with principal balances of $12,000 or less to have their loan forgiven after 10 years.
Missouri Attorney General Andrew Bailey, a Republican who helped lead the case, applauded Ross’ decision. “Congress has never given Biden the authority to bind working Americans for half a billion dollars in other people’s debt,” X wrote on social media.
The White House said it strongly disagreed with the decisions and criticized Republican elected officials who have fought student loan forgiveness.
“Today’s decisions will not stop our administration from using all available tools to provide students and borrowers with the help they need,” White House Press Secretary Karine Jean-Pierre said in a statement.
Biden, a Democrat, announced the SAVE Plan in 2022, and a comprehensive $430 billion plan that would fulfill a campaign promise by canceling up to $20,000 in debt for up to 43 million Americans. It was finally blocked by a successive US Supreme Court in June 2023.
The SAVE program was expected to go into full effect on July 1, although parts of it have already been used, as 414,000 borrowers by mid-May had been offered $5.5 billion in loan relief, according to the Department of Education.
The White House said more than 20 million borrowers could benefit from the SAVE program. Administrators in May said 8 million have signed up, including 4.6 million whose monthly payments have been reduced to $0.
Eleven states challenged the plan in the Kansas case. Crabtree had just dismissed eight states’ claims, but allowed South Carolina, Texas and Alaska to go forward. Seven other states sued Missouri.
No judge on Monday issued an order to keep any debt that has already been discharged intact. Crabtree said Republican-led states have waited too long to sue because they are being irreparably harmed by the ineffective effects of the FINAL Plan.
But Crabtree, who like Ross was appointed by former Democratic President Barack Obama, said the Higher Education Act of 1965 did not expressly authorize the kind of “unprecedented and dramatic expansion” of revenue recovery programs.
He cited estimates by Republican-led state lawmakers in South Carolina, Texas and Alaska that the SAVE Plan would carry a $475 billion price tag over 10 years.
Ross, who favors seven states led by Missouri, reached the same conclusion finding the department “exceeded its mandate by announcing the provision of loan forgiveness as part of the SAVE program.”
