White House vows to appeal court ruling blocking parts of student loan relief plan 

White House Press Secretary Karine Jean-Pierre speaks to the media during a press briefing at the White House in Washington on April 15, 2024. Photo by Madalina Vasiliu. 
White House Press Secretary Karine Jean-Pierre speaks to the media during a press briefing at the White House in Washington on April 15, 2024. Photo by Madalina Vasiliu. 

By Tom Ozimek 
Contributing Writer 

The White House on Tuesday vowed to appeal two district court rulings that block key parts of the federal government’s signature student loan forgiveness plan known as the Saving on a Valuable Education plan. 

In legal challenges to the legitimacy of the SAVE plan by GOP-led states, federal judges in Missouri and Kansas issued separate rulings on Monday that block portions of the program, which aims to lower student loan payments and forgive debts. 

In the Kansas ruling, the judge blocked parts of the SAVE plan nationwide, but declined to unwind portions of it that were already in effect. In the Missouri order, the judge similarly opted to block any further implementation of the program’s student loan forgiveness provisions until the matter can be fully litigated. 

The twin decisions were met with a critical reaction and promises to appeal from the White House and the Department of Education. 

“The Department of Justice will be appealing both decisions to block key provisions of our SAVE Plan,” White House Press Secretary Karine Jean-Pierre wrote in a post on X. “We will never stop fighting to lower monthly payments and help borrowers get out from under the burden of student debt — no matter how many times Republican elected officials try to stop us.” 

Education Secretary Miguel Cardona said in a statement that the federal government would defend the SAVE plan “vigorously,” and in a post on X confirmed that the DOJ would lead the effort. 

The SAVE Plan was created in 2023 after the U.S. Supreme Court blocked President Joe Biden’s sweeping plan to cancel $430 billion in student loan debt for some 43 million Americans. 

The regulations implementing the SAVE Plan are scheduled to fully go into effect on July 1. However, the Biden administration said in January that it would accelerate some of the benefits. 

The Education Department has forgiven $5.5 billion in student debt for more than 414,000 borrowers enrolled in the SAVE program, as of mid-May. 

Overall, all the various student debt forgiveness programs approved by the federal government total $167 billion for 4.75 million Americans, per the Education Department. 

SAVE Plan Details 

Biden created the SAVE program after the Supreme Court rejected his broader plan to forgive student debt. 

Following the Supreme Court ruling, Biden denounced the decision in a speech at the White House on June 30, 2023. He said that the ruling “closed one path” but that his administration would “pursue another.” 

This led to the August 2023 announcement of the SAVE Plan, which Biden called “the most affordable student loan plan ever.” 

One of the aims of the SAVE plan is to halve the required payment on student loans from 10% to 5% of discretionary income and shorten the repayment period for those with lower initial loan balances. This means that borrowers with smaller loan balances could have their loans forgiven in just 10 years instead of 20. 

Another of its goals was to bring many borrowers’ loan payments to zero dollars per month because the monthly payment amount is based on discretionary income. This means that a single borrower who makes around $15 an hour would see their monthly student debt payments zeroed out. At the time the program was announced, the Education Department estimated that more than 1 million additional low-income borrowers would qualify for a zero-dollar payment. 

Under the program, the Education Department would also stop charging any monthly interest that wasn’t covered by the borrower’s payments on the SAVE Plan, meaning that borrowers who pay what they owe under the program would not see their loan balance grow due to unpaid interest. 

The SAVE Plan was challenged in court, with the plaintiffs arguing it’s illegal because Congress didn’t approve it. 

A spokesperson for the Education Department said in an emailed statement that Congress gave it the authority to define the terms of income-driven repayment plans decades ago, adding that the SAVE Plan is the fourth time it has used that authority. 

Legal Challenges 

In Kansas, a coalition of 11 Republican attorneys general sued the Biden administration in a bid to block the SAVE Plan. 

The lawsuit was filed on March 28 in the U.S. District Court for the District of Kansas. It sought a declaration that the program is unlawful along with a judgment stating that the defendants lacked the authority to implement it. 

The Kansas lawsuit argued that if the Biden administration can cancel debt by defining the terms of income-driven repayment plans by executive action, it opens the door to a much bigger debt-forgiveness program. 

U.S. District Judge Michael Crabtree for the District of Kansas ruled on Monday that the plaintiffs were likely to succeed in their claim that the department lacked explicit congressional authority to enact this portion of the program. 

“Defendants have offered colorable, plausible interpretations of the Higher Education Act that could authorize the SAVE Plan, but those interpretations fall short of clear congressional authorization,” Crabtree wrote on Monday. 

Kansas Attorney General Kris Kobach, who spearheaded the legal challenge in Kansas, issued a statement celebrating the ruling as a victory. 

“As the court correctly held, whether to forgive billions of dollars of student debt is a major question that only Congress can answer,” he said. “This is not only unconstitutional, it’s unfair. Blue-collar Kansas workers who didn’t go to college shouldn’t have to pay off the student loans of New Yorkers with gender studies degrees.” 

Separately, a seven-state coalition sued the Biden administration over the SAVE Plan in a federal court in Missouri. 

Missouri Attorney General Andrew Bailey, a Republican, said in April that the SAVE plan would cost Americans $475 billion over 10 years — $45 billion more than the initial student loan cancellation plan the Supreme Court shot down last June, with Bailey citing an estimate by the Wharton School at the University of Pennsylvania. 

In a decision on Monday, U.S. District Judge Judge John Ross for the Eastern District of Missouri blocked the Education Department from forgiving any further loans under the SAVE Plan until he decides the full case. 

Ross also suggested that the SAVE Plan might have exceeded the authority of Education Secretary Cardona and that Missouri would likely be harmed by the program. 

Following the ruling, Bailey praised the decision, calling it a “huge win for the rule of law and Americans who would have been forced to pay off someone else’s debt.” 

Caden Pearson contributed to this report. 

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