US judges block parts of Biden's student loan relief plan

Nate Raymond
Updated ·3 min read
A sign calling for student loan debt relief is seen in front of the Supreme Court

By Nate Raymond

(Reuters) -Two federal judges in Kansas and Missouri on Monday at the urging of several Republican-led states blocked President Joe Biden's administration from further implementing a new student debt relief plan that lowers payments.

U.S. District Judge Daniel Crabtree in Wichita, Kansas, blocked the U.S. Department of Education from implementing parts of a student loan repayment plan not already in effect that cuts borrowers' monthly payments and provides a faster path to have debts forgiven.

He ruled shortly before U.S. District Judge John Ross in St. Louis, Missouri, issued a preliminary injunction barring the department from granting further loan forgiveness under the administration's Saving on a Valuable Education (SAVE) Plan.

The SAVE plan provides more generous terms than past income-based repayment plans, lowering monthly payments for eligible borrowers and allowing those whose original principal balances were $12,000 or less to have their debt forgiven after 10 years.

Missouri Attorney General Andrew Bailey, a Republican who helped lead the litigation, hailed Ross' decision. "Congress never gave Biden the authority to saddle working Americans with half-a-trillion dollars in other people's debt," he wrote on social media platform X.

The White House said it strongly disagreed with the rulings and criticized Republican elected officials who have fought against student debt forgiveness.

"Today's rulings won't stop our administration from using every tool available to give students and borrowers the relief they need," White House Press Secretary Karine Jean-Pierre said in a statement.

Biden, a Democrat, announced the SAVE Plan in 2022, alongside a broader $430 billion program that would have fulfilled a campaign promise by cancelling up to $20,000 in debt for up to 43 million Americans. It was ultimately blocked by the conservative- majority U.S. Supreme Court in June 2023.

The SAVE Plan was slated to fully take effect on July 1, though parts of it already been implemented, with 414,000 borrowers by mid-May having been granted $5.5 billion in debt relief, according to the Education Department.

The White House has said that over 20 million borrowers could benefit from the SAVE Plan. The administration in May said that 8 million are already enrolled, including 4.6 million whose monthly payments have been reduced to $0.

Eleven states challenged the plan in a lawsuit in Kansas. Crabtree had recently dismissed eight of the states' claims, but allowed South Carolina, Texas and Alaska to push forward. Seven other states sued in Missouri.

Neither judge on Monday ordered any debt relief already granted unwound. Crabtree said the Republican-led states waited too long to sue to claim they were being irreparably harmed by the in-effect aspects of the SAVE Plan.

But Crabtree, who like Ross was appointed by Democratic former President Barack Obama, said the Higher Education Act of 1965 did not clearly authorize the type of "unprecedented and dramatic expansion" of income-based repayment plans envisioned.

He cited an estimate by lawyers for the Republican-led states of South Carolina, Texas and Alaska that the SAVE Plan would carry a price tag of $475 billion over 10 years.

Ross, ruling in favor of seven states led by Missouri, reached a similar conclusion in finding the department "overstepped its authority by promulgating a loan forgiveness provision as part of the SAVE program."

(Reporting by Nate Raymond in Boston; Editing by Leslie Adler and David Gregorio and Miral Fahmy)

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • Biden's SAVE plan resumes after legal hurdle

    The Biden administration's student loan repayment initiative, known as the SAVE (Saving on a Valuable Education) plan, has received approval from a federal appeals court to proceed. This development follows a setback last week when a judge blocked a revised version of the plan. Wealth! host Brad Smith provides a breakdown of the SAVE plan, detailing its features and eligibility criteria. For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Angel Smith

  • 3 million student loan borrowers won’t owe a payment in July: Here’s why

    About 3 million student loan borrowers will be placed in forbeareance in July, despite two federal injunctions that came down last week.

  • Appeals court allows part of Biden student loan repayment plan to go forward

    A federal appeals court has allowed the U.S. Education Department to move ahead with a plan to lower monthly payments for millions of student loan borrowers, putting on hold a ruling last week by a lower court. The ruling from the 10th U.S. Circuit Court of Appeals puts back on track a central part of President Joe Biden's efforts to address student debt — a rule that lowers from 10% of discretionary income to 5% the amount that some borrowers qualifying for a repayment plan need to pay. The reduced payment threshold was set to take effect July 1, but federal judges in Kansas and Missouri last week blocked much of the administration’s student loan repayment plan in two separate rulings.

  • Social Media Reacts To Supreme Court's Trump Immunity Ruling

    One person suggested President Joe Biden take advantage of the ruling and "fire the Court and appoint one that doesn’t work for Trump."

  • Melania Trump Resurfaces After Going AWOL for the Debate

    After being AWOL at last week’s presidential debate in Atlanta and her husband’s criminal trial in Manhattan, Melania Trump surfaced on Monday in The Big Apple.According to photos published by the Daily Mail, the former model and first lady was seen Monday in a black coat and shades carrying luggage into Trump Tower, where she and Donald Trump stay when not in Florida at Mar-a-Lago.Her conspicuous absence from the debate last Thursday raised eyebrows as President Joe Biden’s wife was in clear vi

  • MTG’s Pre-Surrender Presser With Steve Bannon Goes Totally Off the Rails

    Rep. Marjorie Taylor Greene (R-GA) held a news conference that was brutally crashed by protesters on Monday afternoon as she sought to rally support for Steve Bannon before he surrendered to start his four-month prison sentence. Greene trekked north to Danbury, Connecticut, to stand alongside her fellow MAGA loyalist, who wrapped his arm around her while he attempted to martyr himself as a victim of political persecution. Behind Greene at one point was a sign that read, “bleach blonde, bad built

  • Liz Cheney fires back at Trump after he calls for ‘televised military tribunals’ for former congresswoman

    ‘You are not a stable adult and are not fit for office’ said former lawmaker from Wyoming

  • Trump seeks to set aside New York hush money verdict hours after Supreme Court ruling

    NEW YORK (AP) — Donald Trump’s lawyers on Monday asked the New York judge who presided over his hush money trial to set aside his conviction and delay his sentencing, scheduled for next week.

  • Trump says he can end the Russia-Ukraine war in one day. Russia's UN ambassador says he can't

    UNITED NATIONS (AP) — Donald Trump has said repeatedly he could settle the war between Russia and Ukraine in one day if he’s elected president again. Russia’s United Nations ambassador says he can’t.

  • 70 percent of voters have decided who they will back in November: Poll

    More than 7 in 10 voters have already decided whom they will vote for in the November presidential election, according to a new poll. The Harvard CAPS/Harris poll released Monday showed 72 percent of respondents said they have already made up their minds, while 28 percent said they are still weighing their choices. That’s a…

  • US Supreme Court leaves Judge Tanya Chutkan to parse Trump immunity

    WASHINGTON (Reuters) -The U.S. Supreme Court's ruling on presidential immunity leaves Judge Tanya Chutkan to determine how much of the federal criminal case involving Donald Trump's efforts to overturn his defeat to Joe Biden in the 2020 election can survive. The 6-3 ruling on Monday, with the court's conservatives in the majority, declared that Trump has broad protection from criminal prosecution for actions that fell within his official responsibilities as president under the U.S. Constitution. The court delegated to Chutkan, a judge on the U.S. district court in Washington, the complex task of determining how to apply that immunity in the four-count criminal indictment obtained last year by Special Counsel Jack Smith.

  • What CEOs are really saying about Biden and Trump behind closed doors

    America faces “two choices between bad and worse,” according to a panel of current and former CEOs.

  • Gretchen Whitmer: I Won’t Run, but Joe Biden Has Lost Michigan After Debate

    Gretchen Whitmer, the Michigan governor seen as one of the Democrats’ best prospects to replace Joe Biden, has ruled out running, Politico reported Monday.But the swing state leader delivered a damning message to the campaign aide whom she called, the outlet’s Jonathan Martin reported, saying that the president’s debate performance will cost him Michigan.Whitmer called the campaign chair, Jen O’Malley Dillon Friday, after a day of frenzied speculation that she would be a frontrunner if Biden cou

  • In their own words: Prime Minister Justin Trudeau's message on Canada Day

    OTTAWA — Prime Minister Justin Trudeau has released a video message to Canadians on Canada Day. Here's what he had to say, in his own words.

  • Jake Tapper Pushes Biden Campaign Cochair to Hold 2-Hour Press Conference to Prove President’s Acuity

    “The fact that you haven’t done that says quite a bit to me,” the CNN anchor and debate moderator tells Sen. Chris Coons The post Jake Tapper Pushes Biden Campaign Cochair to Hold 2-Hour Press Conference to Prove President’s Acuity appeared first on TheWrap.

  • What the U.S. Supreme Court's ruling on immunity means for Donald Trump

    Analysts discuss what happens now that the U.S. Supreme Court has decided anything a president does in an official capacity is immune to prosecution.

  • Voters kick all the Republican women out of the South Carolina Senate

    The only three Republican women in the South Carolina Senate took on their party and stopped a total abortion ban from passing in their state last year. Republican primary voters have now booted all the “Sister Senators” from their party out of office. (Production: Noreen Nasir)

  • The Coming Russian Escalation With the West

    Vladimir Putin has proved quite reluctant to strike directly at the West over its support of Ukraine. But that may not change.

  • The Taliban tell the West to look past harsh edicts on Afghan women and girls and build ties

    ISLAMABAD (AP) — The Taliban on Sunday told the West to look past the measures they have imposed on Afghan women and girls for the sake of improving foreign relations.

  • Lara Trump’s Latest Donald Trump Claim Receives Easiest Fact Check Of All Time

    Donald Trump's daughter-in-law confused the heck out of critics with her boast.