Washington, DC August 29 :
States headed by Republicans have been successful in their lawsuits to halt President Joe Biden's student loan relief proposal, and on August 28th, the United States Supreme Court rejected to resurrect the initiative. This strategy, which aims to reduce monthly payments for millions of borrowers and accelerate loan forgiveness for some, was temporarily halted by a court judgment, and the justices denied the administration's appeal to have the decision lifted.
His administration promised to keep helping as many students as could get out of debt after the Supreme Court rejected Biden's plan to cancel hundreds of billions of dollars in loans in June 2023. Launched in August 2023, the Saving on a Valuable Education (SAVE) plan was hailed by the White House as "the most affordable repayment plan ever created."
The White House estimates that the average borrower would save around $1,000 per year as a result of the plan's reduction of monthly student loan payments from 10% to 5% of discretionary income.
Borrowers whose annual income is below $32,000 can put their payments on hold until their income is higher, which is one of the other perks of the plan. Debt forgiveness for some smaller loans might be granted in as little as 10 years, as opposed to the 20- or 25-year timetable under previous regulations.
Republican state attorneys general contend that the plan's actual cost was around $475 billion, despite the administration's estimate that taxpayers would incur roughly $156 billion over a decade. There were provisions that went into force in February and others that weren't until July.
By claiming that the student debt relief scheme, enacted by the U.S. Education Department during the Biden administration, had exceeded its legal authority, seven states led by Republicans filed a lawsuit in April 2024 seeking to halt the program. On a preliminary basis, U.S. District Judge John Ross of the St. Louis court system prevented the administration from executing the SAVE plan component that would have erased loans to certain debtors in June.
The administration's debt relief plan was further blocked in its entirety while that case progressed by an order from the St. Louis-based U.S. Court of Appeals for the Eighth Circuit on Aug. 9. Because of this, the government filed an emergency petition with the Supreme Court.
The ruling by the Eighth Circuit would result in hundreds of dollars additional payments for millions of borrowers every month, according to U.S. Secretary of Education Miguel Cardona, who added that the Biden administration was firmly opposed to it.
Republican Andrew Bailey, the attorney general of Missouri, expressed his delight at the Supreme Court's ruling on August 28. The suit was filed by the state of Missouri.
"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," according to him. "This is a huge win for every American who still believes in paying their own way."
Separately, the Tenth U.S. Circuit Court of Appeals in Denver is currently hearing an appeal from a different group of Republican-led states challenging the federal government's debt relief scheme. A 6-3 decision last year, backed by six conservative justices on the Supreme Court, thwarted Joe Biden's plan to cancel $430 billion in student loan debt. This was supposed to be a campaign pledge that would have benefited 43 million Americans.
To overturn executive agency decisions of "vast economic and political significance" that have not been expressly authorized by Congress, the conservative justices cited the "major questions" theory, a judicial approach that grants courts wide power.
