The Supreme Court refused to vacate an injunction placed on Joe Biden’s plan to cancel student loans as the case goes through lower courts.
SCOTUS did not give any reason or details.
Republicans states sued the Biden administration over the plan.
The U.S. Court of Appeals for the Eighth Circuit, in St. Louis, placed a “broad hold” on the plan “as it considers the merits of the case.”
The Saving on a Valuable Education (SAVE) plan, introduced in August 2023, is the White House’s most recent attempt at debt forgiveness after the Court rejected a move to cancel over $400 billion in outstanding loans in June 2023.Under the newer model, required payments would be reduced from 10 percent of a borrower’s discretionary income — redefined to mean income above 225 percent of the poverty line — to five percent. Those making less than 225 percent of the poverty line would not be required to pay anything, and outstanding loans totaling $12,000 or less would be forgiven after ten years provided the borrower completed any necessary payments.While the Biden administration initially claimed the SAVE plan would cost $156 billion over the next decade, the eleven states challenging the program in court contended that the actual cost would be $475 billion over the same period of time. The Congressional Budget Office estimated a $276 billion price tag.Of the approximately $1.6 trillion in student-loan debt at the outset of the Biden administration, the president and his team have used executive action to cancel about $144 billion to this point, a total comprising the debt of almost 4 million borrowers. $62.5 billion of the $144 billion total came from the Public Service Loan Forgiveness program, which eliminates student-loan debt for public-sector employees.
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