On Wednesday, August 28, the Supreme Court of the United States rejected the Biden administration’s request to reinstate the latest federal student loan debt forgiveness program. Without public dissent, the Supreme Court ruled that the government did not have the authority to implement President Joe Biden’s earlier proposed student loan forgiveness plan.
The Supreme Court, in a brief order, rejected the Biden administration’s emergency request to lift a nationwide injunction issued by the appellate court. The Court’s order also instructed the appellate court handling the case to “make a decision as soon as possible.”
On August 26, the Department of Education issued a regulation that updated and ultimately finalized the “Saving on a Valuable Education (SAVE)” program enacted in July 2023.
The SAVE program was announced by the Biden administration in 2022 and included a broader plan of up to $430 billion, aiming to forgive up to $20,000 of student debt per person for as many as 43 million Americans, fulfilling a campaign promise made in 2020. This plan was ultimately halted by the conservative-majority Supreme Court in June 2023.
Multiple conservative states, led by Missouri, raised concerns about the plan aimed at alleviating borrowers’ burdens, including a provision that would reduce borrowers’ monthly repayment amounts.
Critics argued that this would require funding of up to $475 billion, which was not authorized by Congress.
According to the conservative Supreme Court justices’ principle of “major questions,” federal agencies cannot implement comprehensive new policies with significant economic impact without explicit authorization from Congress.
States argued in court documents that the Biden administration “claims unchecked authority to cancel each loan, which is stunning.”
States filed a lawsuit in April attempting to block the plan. A federal judge in Missouri only ruled to temporarily suspend the proposal to shorten the repayment period.
However, the U.S. Eighth Circuit Court of Appeals in St. Louis issued a more comprehensive injunction on August 9, ordering a halt to the implementation of all other provisions of the plan.
Missouri’s Attorney General, Andrew Bailey, said in a statement, “This order from the Supreme Court clearly reminds the Biden-Harris administration that Congress did not authorize them to saddle the American working class with $500 billion in Ivy League debt… This is a huge victory for every hardworking American who still believes in self-sufficiency.”
(Adapted from NBC’s reporting)