Court rulings leave student loan borrowers waiting for Biden relief

The White House said Tuesday it would appeal two court orders that halted parts of a major repayment program affecting the monthly bills of millions of borrowers.

This week wasn’t the first, and likely won’t be, the last time that legal hurdles have hampered the implementation of President Joe Biden’s signature student loan forgiveness policy.

In separate rulings on Monday, federal judges in Missouri and Kansas blocked part of the president’s income-driven repayment program, known as Savings for a Valuable Education (SAVE). That plan, which the Biden administration tried to quickly implement, lowered monthly payments to $0 for millions of borrowers. The Secretary of Education often calls it “the cheapest repayment plan in history.”

While the decisions will not reverse any of the roughly $5.5 billion in student debt forgiveness that the federal Department of Education says has already been provided to more than 400,000 borrowers through SAVE, the rulings prevent the agency from continuing to fully implement the program, which is scheduled for next week.

This means that certain elements of the plan, including reducing monthly payments for some borrowers who have taken out undergraduate loans and wiping out the balances of borrowers who have been repaying their loan for ten years, are in legal limbo for the foreseeable future.

More legal problems: The latest GOP lawsuit concerns the SAVE plan

In a statement Tuesday, White House press secretary Karine Jean-Pierre said the administration would appeal the rulings. In the meantime, affected borrowers may have to wait indefinitely for more credible news on debt relief.

“We will never stop fighting to lower monthly payments and help borrowers escape the burden of student debt – no matter how many times Republican elected officials try to stop us,” Jean-Pierre said.

Louisiana Sen. Bill Cassidy, the top Republican on the Senate Education Committee and a frequent critic of Biden’s student loan agenda, praised the orders while criticizing the president’s income-driven repayment plan.

“President Biden’s dishonest and irresponsible policies are nothing more than a cynical attempt to buy votes ahead of the next election,” Cassidy said in a statement.

Who is affected by the latest court rulings on student loans?

When the dust settled on Tuesday, it was still not entirely clear how the orders might immediately impact the more than eight million borrowers registered with SAVE. But given the judges’ reasoning and the Department of Education’s initial reactions to the decisions, borrowers can be sure of a few things.

First, anyone who has already written off their debt will not have to worry about it being recovered. Daniel Crabtree, a federal judge in Kansas, aligned his ruling with parts of SAVE that were scheduled to go into effect on July 1.

In Missouri, U.S. District Judge John Ross made a different argument. He said only the debt relief portion of Biden’s plan was illegal. The portion of the program he green-lighted “continues to provide the vast majority of borrowers with a plan that is likely to lower their payments and limit interest accrual,” he wrote in his decision.

The Department of Education has stated that borrowers enrolled in SAVE may be eligible for forgiveness if they originally took out student loans of $12,000 or less and repaid them over at least 10 years.

Jean-Pierre said the Department of Education will continue to identify additional borrowers that SAVE can help. She said those benefits include lower monthly payments, lowering bills to $0 for anyone making $16 or less an hour and protection against rising interest rates.

Will the rulings impact other student loan relief?

Even though the Biden administration has canceled multi-billion dollar student debt, the specter of lawsuits still hangs over these efforts.

Since the U.S. Supreme Court rejected his initial, sweeping plan last summer, the president has been working on several alternative paths to providing relief to borrowers. One such strategy is SAVE. Another is potentially much more far-reaching and is currently undergoing the regulatory process.

Monday’s decisions cast another shadow on any hopes that Biden will be able to secure greater forgiveness in the near future.

What now for student loan borrowers?

The legal dispute between the Biden administration and Republican state attorneys general trying to end the program is not expected to end any time soon. Procedural dynamics in different courtrooms can impact the schedule in unexpected ways.

Meanwhile, Biden’s other student loan relief plan won’t take effect until next July at the earliest, and that timeline doesn’t take into account other legal hurdles that could further delay borrowers getting help.

Zachary Schermele covers education and breaking news for USA TODAY. He can be reached at [email protected]. Follow him on X at @ZachSchermele.