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Federal Judge Halts Part of Biden’s Student Loan Forgiveness Plan

A federal judge in Missouri has issued a temporary injunction halting the Biden administration’s efforts to implement additional student loan forgiveness under the Saving on a Valuable Education (SAVE) plan. The ruling, delivered by U.S. District Judge John A. Ross, temporarily prohibits the Department of Education from proceeding with further loan cancellations until the court can fully evaluate the case.

The lawsuit, filed by a coalition of seven states including Missouri and Arkansas, challenges the constitutionality of the SAVE plan. The states argue that the loan forgiveness provisions exceed the Secretary of Education’s statutory authority. Judge Ross’s decision to block the loan forgiveness aspect of the plan comes after the Supreme Court last year rejected the administration’s broader initiative to cancel up to $20,000 in federal debt for approximately 43 million borrowers.

Missouri Attorney General Andrew Bailey praised the ruling, stating, “The President lacks the authority to unilaterally cancel student loans. Only Congress holds the power of the purse.” Arkansas Attorney General Tim Griffin echoed this sentiment, emphasizing the importance of upholding the separation of powers.

Despite the injunction, Judge Ross allowed certain aspects of the SAVE plan to continue, such as reducing monthly payments and limiting interest accrual for borrowers. However, the early loan forgiveness provisions remain suspended pending further court review.

In a separate but related legal setback, another federal judge has blocked the implementation of upcoming provisions of the SAVE plan following a lawsuit by Kansas and ten other states. The court found that while no irreparable harm had been shown from current provisions, forthcoming aspects posed a risk of such harm, leading to a preliminary injunction.

The White House and Education Secretary Miguel Cardona have expressed strong disagreement with the court rulings. “We will vigorously defend the SAVE plan and continue our efforts to provide relief to borrowers,” Cardona stated. The Biden administration has already forgiven a substantial amount of debt under the program, benefiting millions of borrowers.

The SAVE plan, introduced last fall, aims to provide lower payments, interest subsidies, and pathways to loan forgiveness. The plan is designed to cut monthly payments in half for many borrowers and accelerate loan cancellation for those with lower balances.

As the legal battles continue, the Biden administration remains committed to pursuing student debt relief. The outcome of these cases will have significant implications for millions of borrowers and the future of federal student loan policies.