WASHINGTON — The Supreme Court on Wednesday turned down a request from the Biden administration to revive its latest initiative aimed at addressing federal student loan debt. The court’s brief order denied an emergency plea from the administration to lift a nationwide injunction imposed by an appeals court. The order was issued without any noted dissents.
The administration’s request was part of a broader effort to implement the “Saving on a Valuable Education” (SAVE) plan, a regulation finalized by the Education Department in July 2023. This initiative was introduced after the Supreme Court ruled that the administration lacked the authority to implement President Joe Biden’s earlier loan forgiveness program.
The SAVE plan, like its predecessor, has faced legal challenges from several conservative-leaning states, led by Missouri. These states argue that the new plan would require up to $475 billion in spending, an amount they contend was not authorized by Congress. The challengers assert that the plan should be blocked for the same reasons the Supreme Court halted Biden’s previous effort.
Under the “major questions” doctrine, which the court’s conservative justices have embraced, federal agencies are prohibited from initiating sweeping new policies that have significant economic impacts without explicit authorization from Congress. In court filings, the states opposing the plan argued that the Biden administration’s “assertion of unfettered authority to cancel every penny of every loan is staggering.”
One of the key provisions of the SAVE plan is a reduction in the repayment cap for undergraduate loans, which would be set at 5% of borrowers’ incomes, down from the previous cap of 10%. Additionally, the plan includes measures to limit accrued interest and shorten the repayment period for certain small loans, eventually allowing them to be forgiven.
Despite these provisions, the plan’s future remains uncertain as it faces continued opposition. Representatives from the Education Department and the Missouri attorney general’s office did not immediately respond to requests for comment on the Supreme Court’s decision.
The appeals court handling the case has been urged by the Supreme Court to “render its decision with appropriate dispatch,” leaving the fate of the SAVE plan hanging in the balance as borrowers and policymakers await further developments.