Federal Court Blocks Biden Student Loan Bonanza

 A federal appeals court on Thursday temporarily shut down President Joe Biden’s nearly half-trillion dollar plan to cancel or lower student debt by transferring it to taxpayers.

The Eighth Circuit Court of Appeals on Thursday paused Biden’s Saving on a Valuable Education (SAVE) Plan in response to a petition from a group of red states led by Missouri Attorney General Andrew Bailey. The petitioners asked the court to “enter an immediate administrative stay of Defendants’ actions to prevent millions of dollars in irreparable harm.”

“Just as this Court did last time Defendants tried to mass cancel nearly $500 billion in student loan debt,” the petition reads.

The states sued Biden over the SAVE Plan, which Bailey said would cost taxpayers $475 billion by transferring debt taken out by wealthy, elite college graduates to the working class.

The SAVE plan would lower student loan payments by up to 50% and forgive any unpaid balance after a certain number of years. 

In a separate lawsuit, a lower court in Kansas previously granted an injunction blocking some of the plan, and the Biden administration appealed to the 10th Circuit Court of Appeals, which set it aside. That case has since been appealed to the Supreme Court.

A Missouri court also blocked part of Biden’s plan, involving outright student loan forgiveness,  and the state appealed to the Eighth Circuit. The Eighth Circuit’s injunction appears to block implementation of the rule in its entirety during litigation, a sign that the court views Missouri’s case as strong.

By overreaching and ignoring Congress’ authority over the federal purse, the Biden administration may have actually rolled back even more longstanding student loan forgiveness programs.

“Defendants chose to streamline previous plans under one ‘umbrella’ regulation,” the appeal reads. “Defendants are thus on the horns of a dilemma: they must either present their current actions as a new plan that is unlawful because it did not go through notice and comment, or they must acknowledge that they are forgiving loans under regulatory provisions that the district court preliminarily enjoined.”

Missouri’s AG was joined by counterparts in Arkansas, Florida, North Dakota, and Ohio.

Biden has boasted that he forgave student debt despite the courts trying to stop him.

In recent days, the Department of Education sent the latest of multiple emails to borrowers that read like taxpayer-funded campaign messages, giving Biden credit for forgiving the loans while blaming Republicans for objecting. The injunction will deal a blow to efforts to use the program to curry votes prior to the election.

In June 2023, the Supreme Court struck down another of Biden’s student loan forgiveness efforts. Biden had sought to use a post-9/11 bill that gave the president powers to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Education Act] as the Secretary deems necessary in connection with a war or other military operation or national emergency.” The court said this law was not relevant to the present circumstance.

Nevertheless, Biden pushed more student debt forgiveness in January 2024.