The Supreme Court on Wednesday left in place a nationwide injunction issued by a lower court blocking President Biden’s latest move to forgive student loans by decreasing monthly payments.
In an unsigned order, the high court denied the administration’s request to start implementing part of its new rule, which alters a repayment plan based on a borrower’s income.
A federal appeals court had blocked Mr. Biden’s plan to forgive nearly $500 billion in student debt last month, putting the administration’s move on hold while litigation plays out.
The justices’ order noted they expect the court of appeals to “render its decision with appropriate dispatch.”
The 8th U.S. Circuit Court of Appeals issued an injunction in July blocking the Biden administration from implementing the Savings on Valuable Education plan.
Other courts previously had halted parts of the SAVE rule, though the administration had begun processing some aspects of it.
Arkansas, Florida, Georgia, Missouri, North Dakota, Ohio and Oklahoma — all red states — had asked the appeals court to pause any further implementation while they challenged the president’s plan, saying it was an end-around of his first failed effort to forgive student debt.
Under the SAVE rule, student loan borrowers would be able to shield more of their income that is calculated when determining monthly payments, reduce the number of years to qualify for loan forgiveness and not have to pay part of the accrued interest.
The administration wants to give borrowers a quicker path to loan forgiveness, and would reduce the monthly payments from 10% to 5% of the borrower’s income and anyone who makes below the federal poverty line of $32,800, would not have to make monthly payments, according to The Associated Press.
The two sides dispute how much the plan would cost taxpayers. The GOP states alleged it would be $475 billion during a 10-year period while the feds estimate $276 billion.
In 2022, the Supreme Court shut down a prior attempt by Mr. Biden to alleviate student loan debt, ruling the government couldn’t forgive some loans for borrowers making under $125,000 or $250,000 as a married couple.
The high court’s 6-3 ruling said the executive branch — specifically, the secretary of education — doesn’t have the authority to waive student debt.
Three other conservative-led states — Alaska, South Carolina and Texas — asked the Supreme Court to block the SAVE plan in a July filing too.
Lower courts in Kansas and Missouri sided with states challenging the president’s newest move, issuing an injunction against parts of its implementation.
But the administration took the Kansas decision to the 10th U.S. Circuit Court of Appeals, which lifted that injunction, giving the administration a partial green light to start implementing the plan.
The red states’ filing sought to reimpose that injunction.
The Supreme Court rejected that request, noting it wasn’t necessary given the 8th Circuit’s injunction remains in place while the litigation is working its way through the courts.
• This story is based in part on wire service reports.
• Alex Swoyer can be reached at aswoyer@washingtontimes.com.
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