Estimated read time: 4-5 minutes
WASHINGTON — In another blow to the Biden administration's plan to lower payments and forgive student loan debt, a court blocked a new repayment plan.
The Department of Education had implemented a new agency rule to create the SAVE program. The U.S. Court of Appeals for the 8th Circuit granted a request for an administrative stay to prevent the Biden administration from implementing or acting under that agency rule. Borrowers enrolled in the program will see their loans frozen until the court process is complete.
The court's ruling was issued Thursday in response to an emergency motion from Missouri Attorney General Andrew Bailey. Utah had joined the effort to block the SAVE program.
"The Court granted our emergency motion to BLOCK Joe Biden's entire illegal student loan plan, which would have saddled working Americans with half-a-trillion dollars in Ivy League debt," said Bailey on social media. "HUGE win for every American who still believes in paying their own way."
Utah Attorney General Sean Reyes had called the forgiveness plan a "purely political election-year maneuver" and said it was "even more problematic" than previous attempts because it used numbers and calculations from the first failed attempt.
HUGE win for every American who still believes in paying their own way.
– Missouri Attorney General Andrew Bailey
U.S. Secretary of Education Miguel Cardona said in a White House press release the administration would continue to fight for its policies in court.
Calling the lawsuits "politically motivated," Cardona said, "The SAVE program is a bold and urgently needed effort to fix what's broken in our student loan system." He said the ruling could have negative consequences for borrowers.
Efforts to block the SAVE program
Ahead of the Thursday ruling, lower courts had already blocked certain provisions of the program, including the administration's ability to forgive student loans, until the court could rule on the constitutionality of the program in full. Republican attorneys general have challenged the SAVE program in court because they say Congress did not give the Biden administration the go-ahead on the program so the administration lacks the authority to implement it.
U.S. District Judge John A. Ross of the Eastern District of Missouri blocked the Department of Education from forgiving more student loans under the SAVE program until he issued a full ruling. Missouri Attorney General Andrew Bailey had sued alongside other attorneys general and claimed the Biden administration lacked the authority to implement the loan forgiveness.
The court ruled it is likely these states will succeed in their argument, which led to the court blocking this provision.
U.S. District Judge Daniel D. Crabtree for the District of Kansas blocked part of the SAVE program that would lower monthly payments for some borrowers. The court ruled the states suing the Department of Education would likely succeed in their argument that Congress did not authorize the administration to do this. Though the states had asked the court to block the program entirely, the court did not do so because parts of the program had already been implemented.
Debt already forgiven was not impacted by the rulings from Ross or Crabtree. Now with the latest federal appeals court ruling, the entire program is blocked, which will pause payments for 8 million borrowers.
Nonprofit group files complaint
Also on Thursday, the Foundation for Accountability and Civic Trust filed a complaint requesting the Office of Special Counsel to investigate whether or not Cardona has violated the Hatch Act. The nonprofit organization pointed toward an email sent to borrowers in July.
The email was addressed to federal student loan borrowers and described Republican elected officials as "siding with special interests."
"President Biden and I are determined to lower costs for student loan borrowers, to make repaying student debt affordable and realistic, and to build on our separate efforts that have already provided relief to 4.75 million Americans — no matter how many times Republican elected officials try to stop us," the email said.
The Foundation for Accountability and Civic Trust said it was submitting the complaint because "the email made political arguments and numerous times specifically identified the political party by name that Cardona opposes in a disparaging manner to generate opposition to the political candidates and party." The group urged the Office of Special Counsel to investigate the email.
The Department of Education did not immediately return the Deseret News' request for comment.
