Two Different Federal Courts Halt Biden’s Student Debt Cancellation Plan on the Same Day
The Biden administration’s effort to implement the SAVE Plan, designed to adjust student loan payments based on income and eventually forgive remaining debts, faced legal obstacles as two federal courts have paused key elements of the initiative. These rulings came after lawsuits from Republican-led states, arguing that the administration bypassed Congress unlawfully to push forward the plan. Despite the halts, the 8 million Americans already enrolled can continue under the plan at least until the litigation concludes. The White House blamed opposition from Republican officials for blocking wider access to reduced payments and faster loan forgiveness. Critics argue that such programs unfairly shift the loan burden to taxpayers and penalize those who have diligently paid off their student loans or opted not to attend college. The outcome of these court decisions could significantly impact a crucial aspect of President Biden’s 2024 campaign strategy.
By Michael Austin June 25, 2024 at 10:50am
The Biden administration’s scheme to pay off student loans with taxpayer dollars was partially blocked by two different federal courts Monday night.
Specifically, judges in Kansas and Missouri ruled in favor of Republican lawsuits levied against the administration’s so-called Saving on a Valuable Education Plan, according to ABC News.
The SAVE Plan, launched in August, is an “income-driven repayment” redistributive scheme designed to restructure student loan payment plans based on the borrower’s income and then “forgive” the remaining loans after a certain number of years have passed.
The Republican states that filed the suits argued the Biden administration illegally circumvented asking Congress for authority to move forward with the plan.
On Monday, two federal judges agreed.
Despite the administration’s apparent failure to follow procedure, the White House issued a statement blaming Republicans for denying students loan “forgiveness.”
“It’s unfortunate that Republican elected officials and their allies have fought tooth and nail to prevent their constituents from accessing lower payments and a faster path to debt forgiveness — and that courts are now rejecting authority that the Department has applied repeatedly for decades to improve income-driven repayment plans,” said White House press secretary Karine Jean-Pierre, according to ABC News.
The two rulings don’t end the SAVE Plan entirely.
Though the Biden administration is now blocked from continuing the program, the 8 million Americans who are enrolled will be allowed to continue to benefit from it, at least until the court cases reach their conclusion.
Is Biden’s student debt “forgiveness” unconstitutional?
Phase two of the multistep plan — which, according to ABC News, involves cutting the size of monthly loan payments by half — has been paused, as has been the latter portion of the plan that fully “cancels” student loan debt for those who have been paying off their loans for more than 10 years.
Conservatives have long opposed the idea of student loan debt “forgiveness.”
They say such plans punish hardworking and financially responsible adults and students who worked to pay off their loans, either during or after attending school — or who didn’t go to college at all.
They note that such plans don’t “cancel” loans but rather pass on the cost to taxpayers.
According to an April report from The Associated Press, as many as seven Republican-led states signed on to the first lawsuit led by Missouri challenging the SAVE Plan.
Just a month prior, the other Kansas-led lawsuit was signed on by GOP attorneys general in 11 states.
“Yet again, the President is unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress,” the Missouri lawsuit argued.
Should the plan fall through, it would mark the failure of what ABC News called “a key part of [President Joe Biden’s] 2024 campaign strategy.”
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