Federal judges in Kansas and Missouri on Monday blocked the full implementation of a student-loan forgiveness program proposed by the Biden administration that was set to launch July 1.
The SAVE Plan, an acronym for Saving on a Valuable Education, has been partially rolled out. The provisions already in effect may remain, United States District Court for the District of Kansas Judge Daniel Crabtree ruled Monday. But elements set for July 1, like reducing payments to 5% of borrowers鈥� income instead of 10%, are on hold while litigation challenging the program moves forward.
A separate ruling out of the Eastern District of Missouri will block only loan forgiveness. The SAVE Plan offered forgiveness for those who borrowed less than $12,000 and have been paying for more than 10 years, with an additional year for each $1,000 additional borrowed.
Both judges wrote that the SAVE Plan, which uses the Higher Education Act to authorize approximately $475 billion in loan forgiveness, is beyond the law鈥檚 legislative intent.
鈥淭he court is not free to replace the language of the statute with unenacted legislative intent. Congress has made it clear under what circumstances loan forgiveness is permitted, and the (income-contingent repayment) plan is not one of those circumstances,鈥� United States District Court Judge for the Eastern District of Missouri John Ross wrote.
The rulings are the result of lawsuits filed by two coalitions of attorneys general: one led by Kansas Attorney General Kris Kobach and the , representing a combined 18 states.
Crabtree dismissed eight of the 11 states represented in Kobach鈥檚 lawsuit earlier this month, finding that Alaska is the only state that can claim harm in Monday鈥檚 ruling over 鈥�$100,000 in lost (federal family education) loan interest over two years.鈥�
Ross determined that Missouri, through quasi-governmental loan servicer MOHELA, has standing. MOHELA, the Missouri Higher Education Loan Authority, that overturned an earlier version of loan forgiveness last year.
Ross wrote that the allegations of harm to MOHELA are 鈥渟ubstantially similar to, if not identical to,鈥� those argued in last year鈥檚 Supreme Court case.
MOHELA has routinely distanced itself from Bailey鈥檚 litigation against loan forgiveness.
Bailey, in a press release, lauded the Missouri ruling as a win for Missourians without large amounts of student-loan debt.
鈥淥nly Congress has the power of the purse, not the president,鈥� he wrote in a statement. 鈥淭oday鈥檚 ruling was a huge win for the rule of law, and for every American who Joe Biden was about to force to pay off someone else鈥檚 debt.鈥�
Kobach also emphasized the judge鈥檚 ruling of a lack of Congressional authorization in the SAVE Plan.
鈥淜ansas鈥檚 victory today is a victory for the entire country,鈥� he said. 鈥淎s the court correctly held, whether to forgive billions of dollars of student debt is a major question that only Congress can answer. Biden鈥檚 administration is attempting to usurp Congress鈥檚 authority. This is not only unconstitutional, it鈥檚 unfair. 鈥�
U.S. Secretary of Education Miguel Cardona said the Department of Justice 鈥渨ill continue to vigorously defend the SAVE Plan.鈥�
鈥淲e designed SAVE to cut undergraduate loan payments in half, avoid interest growth for borrowers making zero-dollar or low payments, and allow at-risk borrowers to reach forgiveness faster,鈥� he wrote in a statement. 鈥淯nder SAVE, nearly 8 million Americans 鈥� one out of five borrowers 鈥� have breathing room from bills that, too often, compete with basic needs.鈥�
Cardona said Republican elected officials are trying to block the plan 鈥渆ven though the department has relied on the authority under the Higher Education Act three times over the last 30 years to implement income-driven repayment plans.鈥�
He promised a continued push from the federal government for student-loan forgiveness. The SAVE Plan is the department鈥檚 second iteration of forgiveness, of which . Bailey and Kobach with 鈥渟ignificant concerns鈥� about the latest plan, which has yet to be implemented.
This story was originally published by the part of the States Newsroom.
