The Biden administration filed an emergency appeal with the Supreme Court on Tuesday, asking the justices to reinstate the president’s recent student loan relief plan.
The appeal calls for the short-lived Revocation of a judgment of a lower court that is currently preventing President Biden from implementing his Saving on a Valuable Education (SAVE) plan, which would reduce student loan repayments for millions of borrowers.
“The rule is a direct exercise of the Department’s explicit statutory authority to set the parameters for income-driven repayment plans – as it has done for three decades,” said U.S. Attorney General Elizabeth Prelogar. wrote to the judges.
In the event that the Supreme Court is not inclined to intervene in its emergency proceedings, Prelogar alternatively asked the judges to examine the legality of the plan in substance and to speed up the examination so that an oral hearing can take place in the autumn.
The court asked opponents of the SAVE plan to respond by Monday afternoon.
This stance is similar to the way the Biden administration handled challenges to its previous student debt plan, which would have provided individual borrowers with at least $10,000 in debt relief.
Last year, the Supreme Court ruined this plan in a 6-3 vote along ideological lines after agreeing to take up the matter fully once it received a request for intervention from the Justice Department.
The SAVE plan was first introduced after the Supreme Court decision.
The first phase began last fall and increased the income excluded from the payments from 150 percent to 225 percent above the federal poverty level. It also forgave accrued, unpaid interest beyond the calculated payments.
The second phase is scheduled to begin in July and will reduce student loan repayments from 10 percent to 5 percent of disposable income and provide additional debt relief options for certain groups.
The millions of Americans who signed up for the fresh income-based repayment program now had their loans deferred by the Department of Education until the plan cleared the legal process, leaving borrowers in limbo once again.
The Penn Wharton budget model estimates that the SAVE plan would cost 475 billion dollars over 10 years.
Two different groups of Republican attorneys general have filed lawsuits against the project, both arguing that the high costs require clearer congressional authorization.
In the first case, seven states – Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma – convinced the 8th U.S. Circuit Court of Appeals on Friday issue an interim injunction to temporarily block the SAVE plan until the case is resolved.
Tuesday’s emergency appeal asks the Supreme Court to overturn that ruling while the trial continues. The Biden administration asked the justices to deny an emergency appeal by plaintiffs in the second case in the meantime.
In this case Alaska, South Carolina and Texas last month called on the Supreme Court to temporarily block essential parts of the SAVE plan. The application has been fully submitted since July 19, but the judges have not yet ruled on it.
After the 8th Circuit stopped the SAVE plan on Friday, the three states wrote in a letter to the judges that “sufficient overlap exists to make emergency relief unnecessary.”
But then they made a bold demand: they wanted to examine the legality of the plan in substance and declare it invalid immediately and without hearing the arguments.
Without the Supreme Court’s intervention, the states said, “it is becoming increasingly clear that the federal government will continue to seek to give away nearly half a trillion dollars of public funds.”
—Updated at 17:57
