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Biden’s SAVE Plan Blocked by Federal Court

Emergency Stay Cites Biden Exceeded Executive Powers.

by TrueNorthNews
August 1, 2024
in National News
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Biden’s SAVE Plan Blocked by Federal Court

A federal court issued an emergency stay on Thursday, blocking President Joe Biden’s Saving on a Valuable Education (SAVE) Plan, a significant setback to the administration’s efforts to provide student loan relief. This decision has prompted the U.S. Department of Education to pause student loan payments for borrowers impacted by the ruling.

The SAVE Plan was designed to offer substantial relief to student loan borrowers by reducing monthly payments and simplifying the repayment process. It aimed to cap monthly payments at a percentage of borrowers’ discretionary income and provide forgiveness after a set number of years of consistent payments. Advocates believed that the plan would alleviate financial stress for millions of Americans and help address the growing student debt crisis.

The emergency stay, however, has put these plans on hold. The ruling came in response to a lawsuit filed by a coalition of states, which argued that the SAVE Plan exceeded the executive branch’s authority and would place an undue financial burden on taxpayers. The court’s decision to grant the emergency stay suggests that the court found the arguments have merit and will need to be thoroughly examined in future legal proceedings.

The U.S. Court of Appeals for the 8th Circuit supported Missouri Attorney General Andrew Bailey and five other states led by Republicans in their request to halt the Biden administration’s implementation of the SAVE Plan during ongoing litigation. These states had previously obtained a partial injunction from a lower court in June, which prevented the Education Department from forgiving any loans through the program. They then successfully appealed to the higher court to completely stop the plan.

Bailey called the appeals court decision a “HUGE win for every American who still believes in paying their own way.” He said SAVE is an “illegal student loan plan, which would have saddled working Americans with half-a-trillion dollars in Ivy League debt.”

Similarly, Louisiana Senator Bill Cassidy echoed these sentiments: “Today’s decision is another rebuke to President Biden’s illegal student loan schemes. He isn’t ‘forgiving’ debt. He is taking the debt from those who willingly took it out to go to college and transferring it onto taxpayers who decided not to go to college or already paid off their loans. This is an abuse of power before an election in an attempt to buy votes at the expense of American taxpayers.”

Student loan forgiveness advocacy groups and policymakers have urged the Education Department to take immediate action to protect borrowers. Eileen Connor, president and executive director of the Project on Predatory Student Lending, highlighted that his decision will confuse affected borrowers and create chaos in the federal student loan system, and will create greater risks of defaults for borrowers. 

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