![Justices trash Biden student loan forgiveness, again](https://peoplesworld.org/wp-content/uploads/2024/09/scourtbuildingphoto980.jpg)
WASHINGTON—The U.S. Supreme Court has trashed Democratic President Joe Biden’s second plan to forgive former college students up to $400 billion in student loan debt—again. And at the behest of state Republican officials, again.
In an unsigned ruling without explanation, the court said Biden’s latest plan, the Saving A Valuable Education (SAVE) program, could not hold up under a challenge from attorneys general of 11 Republican-led states. They kept SAVE on pause pending full hearings on it in lower courts.
Just like Biden’s prior student loan relief plan, which the justices threw out last year, the Republican AGs said SAVE illegally rewrote the law governing student loans to emphasize complete forgiveness, when what the law really demands is phased repayment.
Biden’s SAVE plan cut required yearly payments for undergraduate loans in half, to 5% percent of the borrower’s discretionary income. It also restructured discretionary income so borrowers who make less than 225% of the poverty line would pay nothing.
And if borrowers made all required payments, loans of $12,000 or less would be canceled after 10 years, not 20-25 years.
“All of this is an absolute mess for borrowers, and it’s pretty shocking that state public officials asked the courts to prevent the Biden administration from offering more affordable loan payments to their residents,” Abby Shafroth of the National Consumer Law Center told The New York Times.
“It’s a pretty cynical ploy in an election year to stop the current president from being able to lower prices for working- and middle-class Americans.”
Young Invincibles Executive Director Kristin McGuire called the ruling “a grave and unjust mistake.”
“Keeping the SAVE program on hold will only continue to exacerbate the confusion and uncertainty” borrowers confront “as they try to navigate repayment and decode competing narratives about their loans. Rather than providing guidance or a pathway to repayment, borrowers are left in limbo, again.
“It is outraging that politics continue to be put above the well-being of borrowers and their financial livelihood. The SAVE plan is a legal and just form of student debt cancellation and these politically charged battles should not prevent borrowers from the deeply needed reprieve they need…We must swiftly find a solution.”
The AGs convinced lower courts in the GOP-run “red states,” especially Missouri and Arkansas, that, legally, SAVE flunked. The Eighth U.S. Circuit Court of Appeals in St. Louis sided with the AGs, the student loan lenders, who profit from federal loan guarantees when a borrower defaults, and the colleges, including for-profit institutions that went broke.
The colleges benefited because they were the ultimate recipients, through the students, of the federal loans. Some for-profit colleges went to great lengths, including having students cheat on exams or passing students who were flunking, to keep students in “school” and the money flowing.
Those rip-offs were yet another example of corporate greed preying on vulnerable people seeking to better themselves, while disregarding both the law governing the loans and their own pledges to make good on their promises of middle-class jobs after graduation.
Those failures left ex-students with worthless degrees or none at all, few job prospects in the fields they thought they were training for, and tens of thousands of dollars each in student loan debt—debt Biden’s federal Education Department planned to write off.
Predictably, congressional Republicans chortled when the justices announced their ruling on August 28. The White House denounced it, as did several congressional Democrats.
“I don’t know how many times the Biden-Harris administration needs to hear this before the message sinks in: Its student loan schemes are illegal. Quit trying to force SAVE through,” sneered House Education and the Workforce Committee Chair Rep. Virginia Foxx, R-N.C.
Sen. Bill Cassidy, R-La., top Republican on the Senate committee that handles student loan legislation, says Biden is playing a shell game with borrowers, letting them skip repayments for up to a year while the loans keep accumulating interest the ex-students will have to pay off.
“The Biden-Harris administration is misleading these borrowers to win their vote while setting them up for failure. These borrowers are racking up interest with missed payments while waiting for the false promise of widespread debt ‘cancellation’ this administration has no legal authority to deliver,” he said. “To quote the Andy Griffith Show, ‘Surprise, surprise, surprise.’”
“We won’t stop fighting against Republican elected officials’ efforts to raise costs on millions of their own constituents’ student loan payments,” retorted White House spokesperson Angelo Fernández Hernández.
“Republicans and far-right Supreme Court justices are doing everything possible to harm our borrowers and obstruct the student debt cancellation they demand and deserve,” said Rep. Ayanna Pressley, D-Mass., a leading House advocate of student loan debt forgiveness.
“This latest action, which leaves over eight million borrowers in limbo, is a shameful reminder of” the student loan forgiveness opposition,” Pressley added.
“While the court continues to demonstrate its contempt for the people, we won’t stop pressing to cancel student debt and deliver the essential, life-saving relief borrowers were promised.”
We hope you appreciated this article. At People’s World, we believe news and information should be free and accessible to all, but we need your help. Our journalism is free of corporate influence and paywalls because we are totally reader-supported. Only you, our readers and supporters, make this possible. If you enjoy reading People’s World and the stories we bring you, please support our work by donating or becoming a monthly sustainer today. Thank you!
![](https://peoplesworld.org/wp-content/uploads/2021/08/Headlines-Side-Widget-1.jpg)
MOST POPULAR TODAY
Israel General Strike: Workers slam Netanyahu for sabotaging hostages-for-ceasefire deal
‘Blink Twice’ review: Intense thrills and sharp social commentary make for exciting cinema
Connecticut seniors bust through corporate landlord lies to win rent control
First place for right wing in Eastern Germany not a surprise
Comments