Biden’s Student Loan Debt Relief Program Halted in Two Courts

Two federal judges on Monday separately ordered a temporary halt to parts of a flagship Biden administration program to reduce student debt payments and speed up loan forgiveness for some borrowers.

Large student loan debt cancellation plans are a “major question” that Congress should answer, Judge Daniel D. Crabtree of the US District Court for the District of Kansas wrote, partially granting a coalition of states’ motion for a preliminary injunction in a ruling that will affect states throughout the US. The Biden administration employed a “transformative expansion in regulatory authority without clear congressional authorization” with its latest relief plan, he said.

The states have a “fair chance” of successfully arguing that the administration overstepped by adding a loan forgiveness element, wrote Judge John A. Ross of the US District Court for the Eastern District of Missouri, also on Monday.

The suits—filed in Kansas in March and Missouri in April—targeted a July 2023 Department of Education rule that cuts monthly student loan bills based on income and cancels loan payments after 10 years for those who borrowed as much as $12,000.

The plan, called the Saving on a Valuable Education Plan, was set to take effect July 1 and could cost $475 billion over ten years, according to one estimate from the Wharton School of the University of Pennsylvania.

The litigation marks a broader pressure on a core Biden campaign promise—student debt relief—close to the November 2024 election. The US Supreme Court last June shot down an earlier Biden plan to forgive up to $20,000 in student loans for around 40 million people.

Crabtree, of Kansas, said his ruling doesn’t apply to the parts of the plan that are already in effect but ordered his preliminary injunction to apply nationwide, saying a “broad rule” requires a “broad injunction.”

“Nationwide injunctions are the subject of much controversy, and this court is less than enthusiastic about entering one,” Crabtree wrote.

On June 7, Crabtree said three GOP-led states of the broader coalition of 11 “just barely” showed standing by arguing that the plans reduce revenue for state organizations that own student loans.

Meanwhile, Ross, of Missouri, was more skeptical of the plaintiffs’ arguments throughout his ruling. He limited his injunction to the student loan forgiveness part of the plan, saying he was skeptical that the states could successfully show harm from reducing student loan payments.

Ross wrote on Monday that he found all the plaintiffs’ arguments for standing “tenuous at best” except for the theory that forgiving early loans that are serviced by the Higher Education Loan Authority of the State of Missouri would harm the state.

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.