States Ask High Court to Stop Biden’s Student Debt Relief Plan

A small group of Republican-led states want the US Supreme Court to step in and block President Joe Biden’s second attempt to forgive billions of dollars in student loan debt.

In an emergency request addressed to Justice Neil Gorsuch on Tuesday, Texas, South Carolina, and Alaska asked the court to toss out a lower court order that paves the way for the Education Department to lower loan payments along with canceling student debt under a new rule beginning Aug. 1.

As the justice assigned to the US Court of Appeals for the Tenth Circuit, which issued the order the states are looking to have vacated, Gorsuch can either act on the emergency request alone or refer the matter to the full court for its review.

The Education Department lacks clear congressional authority to implement a debt relief program that will cost taxpayers $475 billion, the states argue, though the Education Department estimates the rule’s total cost to be $156 billion.

Known as the SAVE PLAN, the rule caps repayment of undergraduate loans at 5% of a borrower’s discretionary income, redefines discretionary income, and makes borrowers who took out $12,000 or less for undergraduate or graduate post-secondary studies eligible for forgiveness if they made monthly payments for at least 10 years. A separate part of the plan that permits loan forgiveness remains blocked by a ruling from a federal district court in Missouri.

Last year, the Supreme Court threw out Biden’s first student loan relief plan, which was expected to benefit some 40 million people and cost $400 billion over 30 years. In a 6-3 decision that split along the court’s ideological line, the conservative majority said the administration seized the power of the legislature and didn’t have the authority to cancel that much debt under the HEROES Act.

The department has known since the Supreme Court’s 2023 ruling in Biden v. Nebraska that it can’t cancel hundreds of billions of dollars worth of student loans without clear authorization from Congress, yet the department rushed forward with the final rule, basing it on the Higher Education Act, “which contains no such express grant of authority,” the states said.

The states asked the Supreme Court to consider the emergency request a petition for a writ of certiorari, which would move the dispute from the court’s emergency docket to its merits docket and allow for it to be fully briefed and argued next term.

The case is Alaska v. Cardona, U.S., No. 24A11, 7/9/24.