Poli Alert Politics & Civics
Related Articles
Jimmy Williams
The Supreme Court on Wednesday upheld a block on the Biden administration’s latest plan to reduce student loan repayments, leaving millions of borrowers in financial uncertainty while legal battles proceed in lower courts.
The plan, known as the SAVE program, aims to lower payments for millions of borrowers by cutting income-based repayments from 10% to 5% of discretionary income and exempting payments for those earning under 225% of the federal poverty line—around $32,800 annually for an individual.
The justices rejected the administration’s request to reinstate most of the plan, which had been blocked by the 8th U.S. Circuit Court of Appeals. The Supreme Court’s unsigned order asked the appeals court to issue a decision on the case “with appropriate dispatch.”
This ruling follows the Court’s rejection last year of a larger $400 billion debt relief plan proposed by the Biden administration. Cost estimates for the revised SAVE plan vary, with Republican-led states challenging the program, estimating it could cost $475 billion over a decade, while the Congressional Budget Office places the figure at $276 billion.
Two legal challenges to the SAVE plan have been progressing through federal courts. In June, separate rulings from judges in Kansas and Missouri blocked most of the administration’s efforts to ease student debt repayment, although any debt already forgiven under the plan was unaffected. The 10th U.S. Circuit Court of Appeals had allowed a provision for lower monthly payments to continue, but the 8th Circuit’s decision ultimately halted the entire plan.
The Justice Department had recommended that the Supreme Court step in early, as it did with the earlier debt forgiveness plan, but the justices declined. The Court’s decision has left more than 8 million people enrolled in the SAVE plan and an additional 10 million prospective enrollees in limbo.
Mike Pierce, executive director of the Student Borrower Protection Center, warned of “chaos across the student loan system” as a result of the ruling. “Borrowers are left in this limbo state where their rights don’t exist for them,” he said.
On the other side, Sheng Li, litigation counsel for the New Civil Liberties Alliance, welcomed the Court’s decision to maintain the block, calling the SAVE program “just as unlawful as the one the Court struck down a year ago.”
For now, borrowers seeking financial relief remain caught in the middle of an unresolved legal fight, with no clear timeline for resolution.
