The US Supreme Court on Wednesday declined to reinstate the Saving on a Valuable Education (SAVE) student loan relief initiative by President Joe Biden. The decision keeps a lower court’s injunction in place, raising uncertainty for millions of borrowers.
The SAVE plan had been designed as a more targeted approach to student debt relief to assist low-income borrowers by reducing their financial burden and offering a pathway to loan forgiveness. The education department had estimated that the plan would cost $156 billion over a decade, while other estimates found the cost could actually be as high as $475 billion. The Supreme Court’s decision means that the plan would remain blocked while the 8th circuit continues to review the case.
The legal challenge began when a federal district court found that Missouri had the legal right to sue and blocked loan forgiveness under the SAVE plan. Subsequently, a court in Kansas went on to halt certain aspects of the program that were designed to lower monthly payments and modify repayment periods for borrowers. The Biden administration appealed the decision while also not cancelling loans for borrowers who would receive relief through the shortened repayment period, resulting in the injunction by the 8th circuit. On August 11 the US appeals court had then expanded the block on the program.
The court stated in the unsigned order that “it expects that the Court of Appeals will render its decision with appropriate dispatch”, referring to the 8th Circuit Court of Appeals, which had imposed the injunction during ongoing litigation over the program’s legality, with no justices noting any dissent. Therefore, the case may return to the Supreme Court after the 8th Circuit rules on the merits of the issue.
Vice President Kamala Harris took to X to vow to defend the SAVE program after the decision, while a spokesperson for the Education Department confirmed the administration will keep pushing to lower repayment options for borrowers.
Missouri Attorney General stated:
This court order is a stark reminder to the Biden-Harris Administration that Congress did not grant them the authority to saddle working Americans with $500 billion in someone else’s Ivy League debt. This is a huge win for every American who still believes in paying their own way.
This decision marks the latest emergency ruling as the justices prepare for their new term beginning in October. The latest setback comes after the Supreme Court had rendered its decision blocking Biden’s initial student loan forgiveness program. In July, the US federal appeals court had blocked Biden’s administration from implementing the SAVE student debt relief plan, which had been on hold since March 2020. A congressional report from December 2022 estimated that there were 43 million individual federal student debt borrowers who collectively owed more than $1.6 trillion. Current figures show that approximately 6.9 million individuals are enrolled in the SAVE program. In addition to this, Biden had outlined new plans aimed at delivering student debt relief to over 30 million Americans in April.
