Biden Stung by Student Loan Legal Loss Days Before Taking Effect

A Republican-led effort to block one of President Joe Biden’s student loan debt relief programs in court has succeeded just days before it was set to go into effect.

Decisions by U.S. District Judges John Ross in Missouri and Daniel Crabtree in Kansas, both appointees of former President Barack Obama, on Monday sided with GOP state attorneys general in thwarting Biden’s Saving on a Valuable Education (SAVE) plan, according to Reuters.

The SAVE plan, which was set to go into effect on July 1, was initially announced by Biden in 2022 alongside a since-canceled larger plan that would have erased up to $20,000 in student loan debt for tens of millions of borrowers.

The smaller plan would have offered decreased no-interest monthly payments for borrowers, bringing the amount down to $0 for those with very low income, while also providing early forgiveness for some low-balance borrowers.

“Under the SAVE plan, borrowers whose original principal balances were $12,000 or less will receive forgiveness after 120 payments (the equivalent of 10 years in repayment),” the White House explained in a statement in August.

While the U.S. Supreme Court’s conservative majority struck down the larger debt forgiveness plan last year following a lawsuit by Republican-led states, the SAVE plan had been untouched until this year. Republican states filed suit to block it in March.

Republican Missouri Attorney General Andrew Bailey celebrated the decision in Missouri on Monday, calling it a “huge win of the Constitution” in a post to X, formerly Twitter.

“The Court has granted our motion to BLOCK Joe Biden’s illegal student loan plan,” Bailey wrote. “Congress never gave Biden the authority to saddle working Americans with half-a-trillion dollars in other people’s debt. A huge win for the Constitution.”

South Carolina Attorney General Alan Wilson, also a Republican, had similar thoughts on X, hailing Monday as “a huge win for South Carolina as a judge ruled with us in the fight against the Biden Administration’s illegal student loan forgiveness!”

Newsweek reached out for comment to the White House via email on Monday night.

In statements emailed to Newsweek on Monday, leaders of nonprofit organization Student Borrower Protection Center (SBPC) denounced the decisions as “shocking” and called for U.S. Education Secretary Miguel Cardona to indefinitely shutter the student loan repayment system to avert “chaos.”

SBPC Executive Director Mike Pierce said that “two different gangs of right-wing Attorneys General” had created “a recipe for chaos across the student loan system,” before urging Cardona to “look past this partisan lawfare and protect borrowers” by “shutting the student loan system down until borrowers have access to the rights they were promised under the law.”

“Today’s shocking decision has halted critical access to President Biden’s most affordable repayment plan and denied critical relief to borrowers struggling in repayment for more than a decade,” SBPC Deputy Executive Director Persis Yu said.

“Make no mistake, this lawsuit is a shameful political maneuver designed to hurt President Biden at all costs, and borrowers are merely collateral damage,” Yu added.