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New Legal Roadblocks for Biden’s Student Loan Forgiveness Crusade


June 27, 2024

Last fall President Biden announced his “Plan B” for student loan cancellation after the Supreme Court ruled his initial efforts unconstitutional. Plan B, named the Saving on a Valuable Education (SAVE) Plan, was an attempt to eliminate the burden of student loans by lessening how much borrowers needed to repay. 

But this wasn’t in the spirit of offering a safety net to borrowers who were struggling. It was a back door way of providing loan cancellation. The thought was that existing legislation allowed for modification of repayment programs to be more—even preposterously more—generous despite the court’s original ruling that forgiveness, through more explicit means, wasn’t within the president’s legal authority.

Earlier this week, two separate courts put up roadblocks that may stop him from succeeding in his latest crusade to forgive student debt without Congressional approval.

Two cases, brought to the courts by two coalitions of state attorneys general, argued that the White House overstepped their authority in creating and beginning to implement the SAVE Plan. Both state courts granted injunctions that will temporarily pause some pieces of the plan. Most notably, the Missouri court halted any further loan forgiveness from taking place under the expanded generosity created by SAVE, and the ruling in Kansas will halt the cuts to monthly payments that were scheduled to begin on the first of July.

The court decisions were the first step in a legal process that may ultimately end up at the Supreme Court. The nation’s highest court might once more decide the fate of Biden’s legally dubious efforts to cancel student debt at the expense of taxpayers.

Throughout all of this, the rhetoric from the left portrays a bizarre interpretation of events. For example, Persis Yu, Deputy Executive at the Student Borrower Protection Center, said that, “Today’s shocking decision has halted critical access to President Biden’s most affordable repayment plan and denied critical relief to borrowers struggling in repayment for more than a decade.”

The notion of this plan offering more affordability to borrowers is confusing at best, and misleading at worst. Biden isn’t trying to make loan repayment more affordable in some bid for greater efficiency, he’s trying to pass off the cost of student loan repayment to tax payers in a bid for more votes come November.

In fact, broad debt forgiveness actually incentivizes colleges to raise their costs in the long term. Higher demand for postsecondary education, stimulated through the federal student loan program (and new forgiveness programs that make the program act more like an entitlement program than a loan program), has resulted in ballooning costs for students. Biden’s latest attempt at cancellation exacerbates the worst problems of our current higher education system, and could, ironically, incentivize universities to raise costs.