The Supreme Court on Wednesday has rejected the Biden administration’s request to temporarily reinstate its new student debt plan that would lower payments for millions of borrowers.
The Ministry of Justice Urgent appeal called on the Supreme Court annul a judgment of a lower court President Biden’s plan is currently on hold pending litigation.
There was no public opposition to the order.
This is not a final judgment and the question of whether the plan is legal could ultimately go before the Supreme Court.
“The Court expects that the Court of Appeals will issue its decision with due speed,” says one of the two decisions dismissing the cases at this time.
It is currently hindering the government in implementing its “Saving on a Valuable Education” (SAVE) plan.
“Our administration will continue to vigorously defend the SAVE plan – it has helped over 8 million borrowers get lower monthly payments, including 4.5 million borrowers who had to make a zero-dollar payment each month. And we will not stop fighting efforts by Republican officials to raise the cost of student loan payments for millions of their own constituents,” said White House spokesman Angelo Fernández Hernández.
The first phase began last October and increased the amount of income decoupled from loan payments to 225 percent of the federal poverty line. It also stopped the accumulation of unpaid interest.
In the second phase, which was to begin in July, monthly payments will be reduced from 10 percent of the borrower’s disposable income to 5 percent. The plan also shortens the repayment period for eligible borrowers to 10 years, after which the remaining balance will be forgiven.
About 7.5 million borrowers have already enrolled in the SAVE plan and 150,000 people have had their debts forgiven under the new income-based repayment plan.
Two groups of Republican attorneys general have challenged the plan, arguing that Biden does not have the legal authority to implement it and that it violates a Supreme Court decision last year that struck down a presidential law. previous student debt programs.
“There is a reason the final rule is the administration’s backup plan for mass loan forgiveness: the administration’s statutory arguments are even weaker than in Biden v. Nebraska,” a group of states wrote in court filings, citing that earlier case.
The other group wrote similarly: “This current attempt to unilaterally cancel the debt is just as unlawful as the first attempt, in the amount of 12 figures, which this court rejected.”
Both cases were brought before the Supreme Court in recent weeks as part of the expedited proceedings list after conflicting rulings were made in the lower courts.
Last month, Alaska, South Carolina and Texas asked the judges to reinstate a district court ruling blocking parts of the plan from moving forward. The 10th U.S. Circuit Court of Appeals lifted the block at the request of the Justice Department.
Shortly thereafter, the 8th U.S. Circuit Court of Appeals halted the entire plan in response to the other lawsuit, led by Missouri, joined by six other Republican attorneys general: Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.
The Biden administration then asked the Supreme Court for urgent intervention to temporarily lift that order.
“The states cannot justify allowing this extraordinary injunction to continue harming millions of borrowers while this appeal is being heard,” U.S. Attorney General Elizabeth Prelogar wrote in court documents.
The judges rejected that request, as well as the efforts of the three Republican attorneys general in the other lawsuit.. Both cases will now be referred back to the lower courts.
The Supreme Court also rejected an alternative proposal put forward by all sides to objectively examine the legality of the SAVE plan during its next term.
This would have been consistent with the way the court has handled previous student loan forgiveness lawsuits.
But this time, the Supreme Court is staying away, at least for now.
The story was updated at 5:27 p.m. ET.
