Federal Judges Temporarily Block Part of Biden’s Student Loan Forgiveness Plan
Credit: Valerie Plesch / Bloomberg / Getty Images- Federal judges issued preliminary injunctions to block President Biden’s new income-driven repayment (IDR) plan.
- The SAVE plan offers low- and middle-income borrowers lower monthly payments and early debt forgiveness.
- The injunctions are temporary, and the courts will eventually issue final rulings on the lawsuits.
- These injunctions could affect Biden’s reelection bid in November and leave millions of borrowers in repayment limbo.
Federal judges from the U.S. District Courts of Missouri and Kansas on Monday issued preliminary injunctions blocking the Biden administration from forgiving any more federal student loan debt through its Saving on a Valuable Education (SAVE) plan.
The two injunctions stem from separate cases filed in late March and early April by attorneys general from Republican-led states.
Missouri Attorney General Andrew Bailey led one case, and Kansas Attorney General Kris Kobach led the other.
“By attempting to saddle working Missourians with Ivy League debt, Joe Biden is undermining our constitutional structure,” Bailey said in a statement. “Today’s ruling was a huge win for the rule of law, and for every American who Joe Biden was about to force to pay off someone else’s debt.”
The SAVE repayment plan not only lowers monthly payments for many low- and middle-income borrowers, but it also offers early debt forgiveness for borrowers with relatively low original loan balances. It was set to take full effect on July 1, although the Department of Education (ED) instituted many aspects of the plan early, including debt forgiveness.
The courts’ rulings don’t wholly nullify the SAVE plan.
The injunctions are only temporary until the courts make their final rulings. By issuing injunctions, however, the courts are declaring that both cases have a chance at succeeding.
As BestColleges previously reported, courts striking down Biden’s SAVE plan may have sweeping consequences for some of the president’s other higher education initiatives.
ED crafted the SAVE plan through negotiated rulemaking, so if the courts determine that the SAVE plan was an overreach, some of Biden’s other negotiated rulemaking successes may also be in jeopardy, including:
The Student Borrower Protection Center (SBPC) chastised the two injunctions, stating that the injunctions leave millions of borrowers “in limbo” as the courts decide the cases.
“Make no mistake, this lawsuit is a shameful political maneuver designed to hurt President Biden at all costs, and borrowers are merely collateral damage,” SBPC Deputy Executive Director Persis Yu said in a statement.
“Unfortunately, today, the special interests prevailed, imperiling the financial security of millions and throwing the student loan system into an untenable chaos.”
Depending on how long it takes the courts to reach their decisions, these injunctions could impact Biden’s reelection bid this November.