Supreme Court Maintains Block on Biden's New Student Debt Relief Effort
The Supreme Court has upheld a halt on President Joe Biden’s latest attempt to provide student loan relief, which aimed to extend payment periods and potentially forgive debts of $12,000 (£9,100) or less. This decision marks another setback for Biden’s efforts to deliver broad financial relief to millions of Americans, following the Court’s previous decision to overturn his plan to cancel up to $400 billion in student loans last year.
Earlier this year, Republican-led states launched legal challenges against the new program, named Save (“Saving on a Valuable Education”), arguing that the president had overstepped his executive authority. In response, lower courts issued injunctions to pause the program while the lawsuits proceeded. The Supreme Court has now backed one of these injunctions in an emergency ruling.
Student debt remains a significant issue in the United States, with more than one in ten Americans holding federal student loans. It has become a focal point for young voters in recent elections. So far, President Biden has authorized nearly $150 billion in student debt relief, assisting close to five million borrowers, primarily through executive actions rather than legislative measures.
Biden has promoted the Save plan as “the most affordable student loan repayment plan ever,” with over 400,000 participants already seeing some or all of their debts forgiven, especially among low-income borrowers. A second phase of the plan was set to take effect on July 1, aiming to further reduce monthly payments, particularly for low-income participants by halving their bills.
However, Republican-led states filed lawsuits this summer, contending that only Congress has the power to implement such substantial spending plans and that the proposed relief would be “extraordinarily expensive.” Federal judges responded by issuing injunctions against the Save program, suggesting that the states had a strong likelihood of prevailing in their legal battles.
In Kansas, U.S. District Judge Daniel Crabtree blocked parts of the Save initiative that were designed to lower monthly payments and adjust payment terms for borrowers with loans exceeding $12,000. Meanwhile, in Missouri, U.S. District Judge John Ross prevented the Department of Education from proceeding with debt forgiveness.
Despite these setbacks, the cases diverged in the appeals process. The 10th Circuit Court lifted the injunction in Kansas, while the 8th Circuit Court maintained the injunction in Missouri. This led to both the states and the Biden administration filing emergency appeals to the Supreme Court, placing the injunctions on the so-called “shadow docket.”
On Wednesday, the Supreme Court, which holds a conservative majority, decided to uphold the Missouri injunction, effectively continuing the block on parts of Biden’s student debt relief plan.
