Washington
CNN
—
The Supreme Court on Wednesday refused to lift a sweeping blockade of President Joe Biden’s student loan repayment plan that aims to lower monthly payments and speed the path to debt forgiveness.
The Supreme Court rejected a bid by the Biden administration to reinstate the plan after lower courts blocked it over the summer in a lawsuit brought by GOP-led states against the plan.
No dissenting opinions were noted in the order.
Wednesday’s order has no immediate impact on the 8 million borrowers currently enrolled in the program, called SAVE (Saving on a Valuable Education), which was introduced nearly a year ago. In response to the escalating legal battle over the program, the Education Department last month granted borrowers an interest-free payment forbearance during which they do not have to make monthly payments on their student loans.
The White House, Justice Department and Education Department did not immediately respond to a request for comment. The latest information for borrowers can be found on the agency’s website.
In an order issued on Wednesday, the court used unusual language to say it “expects” the 8th U.S. Circuit Court of Appeals, which is hearing the challenge to the plan, to “pronounce its decision with due speed,” signaling that it wants to let the lower court play out its case before engaging in its emergency proceedings.
The fate of the plan, which the Congressional Budget Office estimates would cost $276 billion, remains uncertain as the courts consider two lawsuits. Last month, Alaska, South Carolina and Texas asked the Supreme Court to maintain a partial freeze on the program while the states’ larger lawsuits against it are processed. In a separate order Wednesday, the court denied that request as well.
Student loan forgiveness was a central plank of Biden’s 2020 presidential campaign, a concession to progressives who had supported more liberal candidates in the Democratic primaries. But the White House has been repeatedly blocked from doing so, including with a key ruling last year in which the court’s 6-3 conservative majority found that Biden had exceeded his authority in seeking to forgive hundreds of billions in student loans.
SAVE is one of the Biden administration’s key student loan policies. The Department of Education implemented the repayment plan last year after the Supreme Court struck down Biden’s broader, one-time student loan forgiveness program.
But the SAVE plan, currently the government’s most generous student loan repayment plan, is based on a different law than the one at issue in this case. Low-income borrowers who participate in SAVE can expect lower monthly payments and a faster path to student loan forgiveness than those who participate in other repayment plans.
Among other things, the plan raises the limit on the income a person can earn before having to make loan payments. Monthly loan payments will be reduced from 10% to as low as 5% of an eligible borrower’s disposable income. It will also shorten the repayment period for certain borrowers with small loans, allowing those loans to be forgiven sooner.
This story has been updated with additional details.
