The White House announced on Tuesday its intention to appeal two district court rulings that have blocked key aspects of the federal government’s student loan forgiveness plan, known as the Saving on a Valuable Education (SAVE) plan.
In response to legal challenges from GOP-led states questioning the legitimacy of the SAVE plan, federal judges in Missouri and Kansas issued separate rulings on June 24 that halted certain elements of the program designed to lower student loan payments and forgive debts.
The Kansas ruling blocked parts of the SAVE plan nationwide but did not reverse portions already in effect. Similarly, the Missouri order halted the implementation of the program’s student loan forgiveness provisions until further litigation.
The White House and the Department of Education criticized these decisions and vowed to appeal. White House press secretary Karine Jean-Pierre stated that the Department of Justice would appeal both rulings to uphold key provisions of the SAVE Plan.
Education Secretary Miguel Cardona pledged to vigorously defend the SAVE plan, with the DOJ leading the effort.
The SAVE Plan was created in 2023 after the U.S. Supreme Court rejected President Joe Biden’s broader plan to cancel $430 billion in student loan debt. The regulations for the SAVE Plan are set to take full effect on July 1, with the Biden administration expediting some benefits in January.
The Education Department has already forgiven $5.5 billion in student debt for over 414,000 participants in the SAVE program. Overall, federal student debt forgiveness programs have forgiven $167 billion for 4.75 million Americans.
The SAVE Plan aims to reduce student loan payments and forgiveness timelines. It also seeks to eliminate monthly interest charges not covered by borrower payments. Plaintiffs have challenged the program’s legality, arguing that Congress did not approve it.
In Kansas, 11 Republican attorneys general filed a lawsuit against the Biden administration challenging the SAVE Plan’s lawfulness. U.S. District Judge Michael Crabtree ruled in favor of the plaintiffs on June 24, stating that the Department lacked explicit congressional authority for this aspect of the program.
Kansas Attorney General Kris Kobach praised the ruling as a victory, emphasizing that only Congress should make decisions on forgiving student debt. Blue-collar workers in Kansas who did not attend college should not be responsible for paying off the student loans of individuals in New York with degrees in gender studies.
Additionally, a coalition of seven states filed a lawsuit against the Biden administration over the SAVE Plan in a federal court in Missouri. Missouri Attorney General Andrew Bailey, a Republican, stated in April that the SAVE Plan would cost Americans $475 billion over 10 years, which is $45 billion more than the previous student loan cancellation plan that was rejected by the Supreme Court last June. This estimate was provided by the Wharton School at the University of Pennsylvania.
On June 24, U.S. District Judge John Ross for the Eastern District of Missouri issued a decision blocking the Education Department from forgiving any additional loans under the SAVE Plan until the full case is decided. Judge Ross also indicated that the SAVE Plan may have exceeded the authority of Education Secretary Cardona and that Missouri could potentially be harmed by the program.
Following the ruling, Attorney General Bailey praised the decision, describing it as a “significant victory for the rule of law and for Americans who would have been burdened with paying off someone else’s debt.”
(Caden Pearson contributed to this report.)
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