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Student-loan borrowers enrolled in Biden's new repayment plan may have gotten a win after a federal judge ruled only 3 states 'just barely' have standing to challenge the plan
By Ayelet Sheffey,
2024-06-10
President Joe Biden.
MANDEL NGAN/AFP via Getty Images
Eleven GOP state attorneys general filed a lawsuit to block the SAVE student-loan repayment plan.
A district judge in Kansas ruled that only three of those states have standing to sue.
Even so, the judge said, their case is weak.
Student-loan borrowers enrolled in President Joe Biden's new repayment plan may have just gotten some relief from legal challenges.
The states requested that the court stop the SAVE plan's implementation. Kansas District Judge Daniel Crabtree issued his response on June 7, and he said that only three states — South Carolina, Texas, and Alaska — "just barely" have standing to prove the SAVE plan will reduce their states' revenues.
To prove standing, plaintiffs have to show that they'd be injured by the policy, that the injury can be directly traced back to the defendant, and that the relief they're seeking would address those injuries. Crabtree wrote that the three states' standing is "weaker than the one that prevailed" at the Supreme Court.
Crabtree also said that the other eight plaintiffs' argument that the SAVE plan's relief would undermine their recruiting efforts through the Public Service Loan Forgiveness program has not, and will not, hold up in court.
"No court has ever bought into this theory, and this court declines to become the first," he wrote. "These plaintiffs simply have no skin in the game. Their answer to Justice Scalia's colloquial expression of standing—What's it to you?—is this: It's nothing."
Crabtree explained how this case is different from Biden v. Nebraska, the case brought before the Supreme Court. In Biden v. Nebraska, the plaintiffs argued that Biden's plan at the time to forgive up to $20,000 in student debt for borrowers making under $125,000 a year would harm student-loan company MOHELA because it would no longer be able to collect revenue from servicing forgiven loans.
In the case to block SAVE, the states are not arguing they would lose money from servicing loans. They're instead arguing that SAVE would cost them interest revenue because borrowers would have an incentive to consolidate privately held loans into direct loans, making the federal government their sole lender.
Biden's student-debt relief efforts are no stranger to legal challenges. In April, another seven GOP attorneys general filed a separate lawsuit to block SAVE , and in October, the New Civil Liberties Alliance filed a lawsuit on behalf of conservative groups the Cato Institue and Mackinac Center for Public Policy to block the Education Department's one-time account adjustments.
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