Two federal judges issued separate rulings on Monday, temporarily halting key aspects of a significant Biden administration initiative aimed at reducing student debt payments and accelerating loan forgiveness for certain borrowers.
Federal Judges Challenge Student Loan Relief Plan
In his ruling, Judge Daniel D. Crabtree of the US District Court for the District of Kansas partially granted a motion for a preliminary injunction, brought forth by a coalition of states. He noted that large-scale student loan debt cancellation is a “major question” that should be addressed by Congress. Crabtree criticized the administration for what he described as a “transformative expansion in regulatory authority without clear congressional authorization.”
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Judge John A. Ross of the US District Court for the Eastern District of Missouri similarly questioned the administration’s authority, suggesting that the states have a “fair chance” of proving that the Biden administration overstepped by incorporating a loan forgiveness component into its plan.
Background on the Lawsuits
The lawsuits, filed in Kansas and Missouri earlier this year, specifically target a Department of Education rule from July 2023. This rule adjusts monthly student loan payments based on income and forgives loan payments after ten years for borrowers with up to $12,000 in debt. The Saving on a Valuable Education (SAVE) Plan was scheduled to take effect on July 1, with an estimated cost of $475 billion over ten years, according to the Wharton School of the University of Pennsylvania.
Broader Implications for Biden’s Campaign Promise
These legal challenges place additional pressure on a core promise of Biden’s campaign—student debt relief—especially as the 2024 election approaches. This follows a previous setback last June when the US Supreme Court struck down an earlier plan to forgive up to $20,000 in student loans for approximately 40 million people.
Details of the Rulings
Crabtree’s ruling does not affect the parts of the plan that are already in effect, but he ordered a preliminary injunction with nationwide implications. He expressed reservations about nationwide injunctions but felt compelled to issue one in this case.
In his decision, Crabtree acknowledged that three GOP-led states within the coalition demonstrated “just barely” sufficient standing by arguing that the relief plans would reduce revenue for state entities that own student loans.
Conversely, Ross was more skeptical about the plaintiffs’ arguments but ultimately issued a more limited injunction, specifically targeting the student loan forgiveness aspect of the plan. He questioned the likelihood of the states proving harm from reduced student loan payments but found the argument about harm to the Higher Education Loan Authority of the State of Missouri more convincing.
Case Information
The cases are State of Missouri v. Biden, E.D. Mo., No. 4:24-cv-00520, 6/24/24, and State of Kansas v. Biden, D. Kan., No. 6:24-cv-01057, 6/24/24.
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