This week wasn’t the first time – nor will it likely be the last – that legal hurdles put a damper on President Joe Biden’s signature student loan forgiveness policies.
In separate rulings Monday, federal judges in Missouri and Kansas blocked parts of the president’s income-driven repayment program known as Saving on a Valuable Education, or SAVE. That plan, which the Biden administration has tried to roll out quickly, has lowered monthly payments to $0 for millions of borrowers. The secretary of education frequently refers to it as the “most affordable repayment plan in history.”
Although the decisions won’t reverse any of the roughly $5.5 billion in student debt cancellation the federal Education Department says it has already provided to more than 400,000 borrowers through SAVE, the rulings prevent the agency from moving ahead with full implementation of the program, which was slated for next week.
That means some portions of the plan, including cutting down monthly payments for some borrowers who took out undergraduate loans and wiping out balances of borrowers who have been in repayment for a decade, are in legal limbo for the foreseeable future.
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In a statement Tuesday, Karine Jean-Pierre, the White House press secretary, said the administration will appeal the rulings. In the meantime the affected borrowers might have to wait an indefinite amount of time for more reliable news about their debt forgiveness.
“We will never stop fighting to lower monthly payments and help borrowers get out from under the burden of student debt – no matter how many times Republican elected officials try to stop us,” Jean-Pierre said.
Louisiana Sen. Bill Cassidy, the ranking Republican on the Senate education committee and a frequent critic of Biden’s student loan agenda, applauded the injunctions, blasting the president’s income-driven repayment plan.
“These unfair, irresponsible policies from President Biden are nothing more than a cynical attempt to buy votes before the next election,” Cassidy said in a statement.
Who is affected by latest court rulings on student loans?
As the dust settled Tuesday, it still wasn’t entirely clear how the injunctions could immediately impact the more than eight million borrowers enrolled in SAVE. But based on the judges’ rationale and the Education Department’s initial reactions to the decisions, borrowers can be certain of a few things.
First, anyone who already had their debt canceled won’t have to worry about it being clawed back. Daniel Crabtree, the federal judge in Kansas, tailored his ruling to the parts of SAVE that were set to take effect July 1.
In Missouri, U.S. District Judge John Ross made a different argument. He determined only the debt cancellation portions of Biden’s plan were unlawful. The part of the program he greenlit “still provides a vast majority of borrowers with a plan that is likely to lower their payments and limit interest accrual,” he wrote in his decision.
The Education Department has said borrowers enrolled in SAVE could have their debt wiped away if they originally took out $12,000 or less in student loans and had been in repayment for at least 10 years.
Jean-Pierre said the Education Department will continue to sign up additional borrowers who could be helped by SAVE. She said those benefits include lower monthly payments, slashing bills to $0 for anyone making $16 or less an hour and protection from ballooning interest.
Will the rulings impact other student loan relief?
Although the Biden administration has canceled billions of dollars in student debt, the specter of court challenges continues to loom over those efforts.
Since the U.S. Supreme Court struck down his initial large-scale plan last summer, the president has been working on several alternative paths to deliver relief to borrowers. One of those strategies is SAVE. Another is potentially much more far-reaching and is currently working its way through the regulatory process.
Monday’s decisions cast another pall over any broader hope Biden will succeed in delivering more forgiveness in the near future.
What now for student loan borrowers?
The legal tit for tat between the Biden administration and Republican state attorneys general trying to take down the program is not expected to end any time soon. The procedural dynamics in different courtrooms could affect the timeline in unexpected ways.
Biden’s other student loan relief plan, meanwhile, would not take effect until July of next year at the very earliest – and that timeline does not take into consideration other legal obstacles, which could further delay borrowers from getting help.
Zachary Schermele covers education and breaking news for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele.
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