The U.S. Supreme Court has declined to restore the multibillion-dollar student debt relief plan proposed by the Biden administration, opting to keep the plan on hold while various lawsuits move through lower courts.
The 8th U.S. Circuit Court of Appeals had initially blocked most of the proposed relief plan, and the administration had requested the Supreme Court to reinstate it, but the request was rejected by the court in an unsigned order.
The big picture: The Supreme Court expects the appeals court to issue a comprehensive decision on the relief plan “with appropriate dispatch,” indicating a desire for timely progress on the matter.
- The Education Department’s proposed plan aims to expedite loan cancellation, reduce monthly income-based repayments from 10% to 5% of a borrower’s discretionary income, and eliminate payments for borrowers earning less than 225% of the federal poverty line (equivalent to $32,800 annually for a single person).
- Notably, the Supreme Court’s conservative majority had previously rejected an earlier student loan forgiveness plan that sought to eliminate over $400 billion in student loan debt, reflecting past pushback against such initiatives.
- The projected cost of the new SAVE plan varies, with Republican-led states disputing the plan’s expenses by estimating it to cost $475 billion over 10 years, while the administration references a Congressional Budget Office estimate of $276 billion.
