Supreme Court Shuts Down Biden’s Student Loan Debt Relief Plan — Again

After killing an initial plan to wipe away $400 billion in student debt in 2023, the Supreme Court has maintained a temporary block on President Joe Biden’s newly amended approach to providing millions of borrowers with assistance.

The 2023 plan was ruled unconstitutional in a 6-3 vote along idealogical lines, with the majority claiming the amount of assistance was too “significant.” The Biden administration responded by introducing the Saving on Valuable Education, or SAVE, plan last fall. The plan provided relief to specific groups of borrowers, including people receiving disability benefits, those working in public service sectors, and others enrolled in select relief programs already.

Earlier this summer, two lawsuits challenging the SAVE plan were submitted to the U.S. Court of Appeals for the Eighth Circuit by Republican-led states, with Missouri at the helm. The challenges put the plan on hold. The Biden administration submitted an emergency application to have the hold lifted in order to cut monthly payments and speed up the relief process — which the Supreme Court denied on Wednesday.

“The application to vacate injunction presented to Justice Kavanaugh and by him referred to the Court is denied,” the court order reads. “The Court expects that the Court of Appeals will render its decision with appropriate dispatch.”

No explicit reason for the decision was provided and no public dissents were noted in the document.

While the fate of the plan sits in legal purgatory, the Department of Education has attempted to make borrowers a little less miserable by placing borrowers in an interest-free forbearance. As of last month, such borrowers are not required to make their monthly loan payments. Income-based repayments are currently set at 10 percent of the borrower’s discretionary income, while the amended request pushes to decrease that number to five percent. It would also ease pressure on borrowers who earn under 225 percent of the federal poverty line by not requiring them to make payments at all.

While the Biden administration has referenced a Congressional Budget Office estimate that the relief would cost $276 billion, the Republican-led states challenging the relief plan have claimed that it would actually cost closer to $475 billion.

For the eight million borrowers are already enrolled in the SAVE plan, the future of their repayment plans remains in limbo.

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