US supreme court will not reinstate Biden’s student loan repayment plan

The US supreme court decided on Wednesday that it will not reinstate the Biden administration’s multibillion-dollar student loan repayment plan, Save, which aims to lower monthly payments for millions of borrowers.

The plan was blocked by a federal appeals court earlier this summer as a result of a legal challenge led by several Republican states.

In an unsigned order with no noted dissents, the court said that it “expects that the court of appeals will render its decision with appropriate dispatch”.

Additionally, the court’s decision has no immediate impact on the 8 million borrowers currently enrolled in the program.

In June, US district judge John Ross in St Louis blocked the Biden administration on a preliminary basis from implementing the provision of the Save plan that would have granted loan forgiveness to certain borrowers.

A ruling by the St Louis-based US court of appeals for the eighth circuit on 9 August went further, blocking the administration’s debt relief plan in its entirety while that case proceeded. This prompted the administration’s emergency filing to the supreme court.

Miguel Cardona, the US secretary of education, said the Biden administration strongly disagreed with the eighth circuit’s decision, saying it would force millions of borrowers to pay hundreds of dollars more each month.

A separate challenge by another set of Republican-led states to the administration’s debt relief program is pending in the Denver-based 10th US circuit court of appeals.

Under the plan , borrowers would have their monthly payments lowered and those who originally took out federal loans of $12,000 or less would have their outstanding debts forgiven after 10 years.

Several Republican states have accused the Biden administration of exceeding its authority by setting repayment conditions and unilaterally erasing loans.

Meanwhile, lawyers for the Biden administration have argued that the federal appeals court’s “extraordinary injunction has scrambled the [education] department’s administration of loans for millions of borrowers”.

They also said: “The eighth circuit’s injunction has severely harmed millions of borrowers and the department by blocking long-planned changes and creating widespread confusion and uncertainty.”