Biden’s latest student loan debt relief plan denied by Supreme Court

The Supreme Court denied a plea from the Biden administration to revive a plan aimed at tackling federal student loan debt. The plan, known as the Saving on a Valuable Education (SAVE) plan, had been challenged by conservative-leaning states. The court’s decision reaffirmed that the administration lacked the authority to implement a loan forgiveness program without explicit authorization from Congress. The new plan proposed several provisions, including capping repayment for undergraduate loans at 5% of income and shortening payment periods for small loans. However, the court found that the plan required spending $475 billion that was not authorized by Congress, leading to the injunction against it. The Education Department expressed disappointment in the court’s decision but will continue to pursue lower repayment options for borrowers. The administration contends that the changes to repayment amounts are allowed under a 1993 federal law, but the court found that the plan exceeded the authority granted to the Education Department by Congress. The decision impacts around 8 million people already enrolled in the SAVE plan and disrupts repayment terms dating back to 1994. The court’s rejection of the plan has also affected other cases challenging it in different courts. The Biden administration will continue to seek ways to minimize harm to borrowers as they await a final decision from the appeals court.

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