The Supreme Court’s conservative majority has once again halted President Biden’s efforts to provide relief to millions of Americans burdened by student debt. This time, the high court upheld a pause on the Saving on a Valuable Education (SAVE) program, a critical component of Biden’s latest attempt to ease the financial strain on student loan borrowers. The decision leaves millions of borrowers in uncertainty, casting doubt on the future of student debt relief in the United States.
The SAVE program, introduced by the Biden administration, was designed to offer significant financial relief to student loan borrowers by reducing their monthly payments and shortening the time frame for loan forgiveness. The program lowered the monthly payments on undergraduate loans to 5% of the borrower’s discretionary income, down from 10%, and proposed canceling loans of $12,000 or less after 10 years of consistent payments—half the time previously required.
This program was particularly crucial as it aimed to help those struggling to make ends meet, reducing the likelihood of borrowers being trapped in debt for decades. The Biden administration argued that the SAVE program was consistent with a 1993 federal law that allows the Secretary of Education to establish income-contingent repayment plans based on “the appropriate portion of the annual income of the borrower.”
However, several Republican-led states, including Missouri, filed lawsuits against the SAVE program, claiming that the administration lacked the authority to implement such sweeping changes without explicit congressional approval. These states argued that the program would cost up to $475 billion and should be blocked under the “major questions” doctrine, which restricts federal agencies from initiating significant economic policies without clear authorization from Congress.
The U.S. Court of Appeals for the 8th Circuit sided with the Republican states last month, ruling that the program should be paused while the merits of the case were evaluated. The Biden administration quickly appealed to the Supreme Court, requesting the high court to lift the pause and allow the SAVE program to go back into effect, which would enable approximately 8 million Americans already enrolled in the program to benefit from lower payments and other provisions.
The Supreme Court, however, issued a brief order denying the administration’s emergency request to lift the nationwide injunction. This decision marks yet another setback for Biden’s efforts to provide student debt relief, following the court’s earlier ruling that struck down a broader debt cancellation plan.
Critics of the Supreme Court’s decision argue that it reflects the conservative majority’s ongoing efforts to block economic relief measures that could benefit working- and middle-class Americans. Mike Pierce, executive director of the Student Borrower Protection Center, expressed frustration with the ruling, stating that the Supreme Court “bought into the 8th Circuit’s legal fiction that pausing affordable payments is ’preserving the status quo,’” denouncing the decision as “bullshit.”
The pause on the SAVE program has immediate and profound implications for the 8 million borrowers who were already enrolled and expecting relief. These borrowers now face the prospect of higher monthly payments, continued accrual of interest, and prolonged debt obligations. For many, like Ashton Pittman, an editor for the Mississippi Free Press, the SAVE program had been a lifeline. Pittman noted that the program had reduced his monthly payments, allowing him to reliably make payments for the first time. “But I reckon the U.S. Supreme Court does not like millions of people being able to afford to make payments on their student loans,” Pittman said, reflecting the frustration felt by many borrowers across the country.
The broader economic implications of the Supreme Court’s decision are also significant. Student debt has long been a burden on the U.S. economy, with over 45 million Americans owing a collective $1.7 trillion. The financial strain of student loans has contributed to delays in homeownership, reduced consumer spending, and increased economic inequality. By halting the SAVE program, the Supreme Court’s decision could exacerbate these issues, making it harder for millions of Americans to achieve financial stability.
The Biden administration is now faced with the challenge of finding alternative legal and political strategies to deliver on its promise of student debt relief. Advocacy groups like the Debt Collective have criticized the administration for not being aggressive enough in its approach, suggesting that Biden should sever ties with the Missouri Higher Education Loan Authority (MOHELA) and pursue debt cancellation through executive order.
Legal experts suggest that the administration could explore other avenues to achieve its goals, such as implementing narrower, more targeted relief measures or working with Congress to pass legislation that explicitly authorizes comprehensive student debt relief. However, the current political climate, coupled with the conservative composition of the judiciary, makes it unlikely that such efforts will be successful in the near term.
The Supreme Court’s decision also has significant political implications as the 2024 elections approach. The ruling may galvanize voters who are frustrated with the judiciary’s role in blocking economic relief efforts, potentially influencing the outcome of both congressional and presidential races. The Biden administration will likely face increased pressure to find ways to bypass judicial obstacles and deliver tangible results for the millions of Americans struggling with student debt.
“But I reckon the U.S. Supreme Court does not like millions of people being able to afford to make payments on their student loans,” said Ashton Pittman.
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