The Biden administration has responded to an appellate court’s decision to block one of its student debt relief programs by pausing payments for the 8 million borrowers already enrolled. This move has been welcomed by advocates, even as some call for further action.
The Student Borrower Protection Center stated, “Halt student loan payments and protect borrowers ASAP!” echoing the sentiment of many advocacy groups. The Debt Collective also urged the administration to expand the pause to all student loan payments. They recalled the period during the COVID-19 pandemic when payments were halted under both the Trump and Biden administrations, noting that restarting payments was an “unforced error.”
In response to the recent court ruling, the U.S. Department of Education announced it would place borrowers enrolled in the SAVE plan in an interest-free forbearance. This move aims to protect borrowers from immediate financial strain while the administration continues to defend the plan in court.
A federal appeals court in Missouri issued a ruling on Thursday blocking the entire SAVE plan. Republican-led states, including Arkansas, Florida, and Missouri, have argued that the Biden administration overstepped its authority with the SAVE plan, accusing it of finding a roundabout way to forgive student debt after the Supreme Court blocked a broader debt cancellation plan in June 2023.
Missouri Attorney General Andrew Bailey, a Republican, celebrated the ruling as a “HUGE win for every American who still believes in paying their own way.” Bailey argued that the SAVE plan would have unfairly burdened working Americans with half-a-trillion dollars in debt from Ivy League institutions, despite only 0.3% of federal student borrowers having attended Ivy League colleges.
The SAVE plan’s key provisions include lower monthly payments compared to other federal student loan repayment plans and quicker debt erasure for those with small balances. U.S. Secretary of Education Miguel Cardona criticized the legal challenges, stating, “It’s shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers.”
Before the legal challenges, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE plan. This effort was part of the administration’s broader goal to make higher education more affordable and accessible.
Aissa Canchola Bañez, political director for Protect Borrowers Action, emphasized the urgency of the situation, stating, “Borrowers shouldn’t be expected to live court judgment by court judgment.” She highlighted the need for the Biden administration to deliver on sweeping loan forgiveness despite ongoing legal challenges.
Experts predict that President Joe Biden’s revised plan for wide-scale debt cancellation is likely to face similar legal hurdles as the SAVE plan. The administration aims to implement this relief weeks before the upcoming election, underlining the political stakes involved.
The complexities of achieving comprehensive student debt relief are underscored by the ongoing legal battles, political opposition, and advocacy efforts. As Cardona emphasized, the administration remains dedicated to making higher education more affordable, and the fight for student loan reform continues.
“We are grateful that the Biden-Harris administration will continue to push for affordable monthly payments as bad faith actors continue to throw up roadblock after roadblock,” said Randi Weingarten, president of the American Federation of Teachers. “In the end, broad-based debt cancellation is the only solution—and we will continue to advocate for it through every avenue available.”
As the legal battles unfold, the administration’s commitment to protecting borrowers and pursuing debt relief remains a focal point. Advocates urge the administration to take further action to ensure financial stability for all borrowers, emphasizing the importance of addressing the student debt crisis comprehensively.
“These borrowers are on a roller coaster that’s being forced off the rails by far-right politicians who will do anything in their power to hurt them, rather than help them get the relief they deserve,” said Weingarten.
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