Federal judges in Missouri and Kansas have blocked parts of President Joe Biden's SAVE (Saving on a Valuable Education) plan following lawsuits from Republican states.
The Daily Caller reported that the injunctions prevent further debt forgiveness and the reduction of monthly payments under the program until the cases are fully reviewed.
The Biden administration’s SAVE plan, an income-driven repayment program, aimed to lower monthly payments for student loan borrowers.
However, recent rulings by federal judges John A. Ross of Missouri and Daniel Crabtree of Kansas have put a halt to key components of this initiative.
Judge Ross and Judge Crabtree issued orders that block further debt forgiveness and reduction in monthly payments under the SAVE plan. Specifically, Ross's decision stops any immediate loan forgiveness, while Crabtree's ruling will take effect on June 30.
The Department of Education has been enjoined from further lowering payments or eliminating more debt through the program. Subsequently, the Department of Justice has announced its intention to defend the SAVE plan vigorously.
Kansas Attorney General Kris Kobach and Missouri Attorney General Andrew Bailey are pivotal figures in the challenge against the SAVE plan. Kobach filed a lawsuit in March, followed by Bailey in April, both contending that the student loan forgiveness plan was unconstitutional.
Furthermore, Missouri Attorney General Andrew Bailey emphasized, “The President does not get to thwart the Constitution when it suits his political agenda.” Bailey added his reasons for filing the lawsuit were to prevent what he perceived as an attempt to shift debts unjustly onto others.
This wave of legal battles follows a significant development in June 2023 when the Supreme Court rejected the Biden administration’s broader student loan forgiveness plan. In response to this ruling, President Biden introduced the SAVE plan, which sought to limit student loan repayments to 5% of a borrower’s monthly income, down from the previous 10%.
The court's decisions have brought uncertainty to borrowers relying on the SAVE plan for financial relief. The sudden prohibition affects those who were expecting some form of loan forgiveness or reduced payments, at least temporarily.
U.S. Secretary of Education Miguel Cardona expressed his disapproval of the court rulings, stating, “We strongly disagree with the Kansas and Missouri District Court rulings, which block components of the SAVE Plan that help student loan borrowers.” He reassured that the Department of Justice will steadfastly defend the SAVE plan.
The Biden administration and its allies argue that the SAVE plan is essential for making higher education accessible and affordable. The Department of Justice is preparing to challenge the injunctions imposed by the federal judges to reinstate the program's provisions.
The core contention lies in the constitutionality of the SAVE plan. Opponents argue that the executive branch overstepped its authority, while supporters claim these measures are vital for financial fairness and educational opportunity.
The immediate future of the SAVE plan remains ambiguous as the legal proceedings continue. With the potential for appeals and counter-arguments, both sides are preparing for a prolonged legal battle.
The SAVE plan’s fate now rests in the hands of the judicial system as legal experts and government officials await further developments. The lawsuit outcomes will set a precedent for the extent of executive power in modifying student loan policies.
