On Monday, two federal court judges issued nationwide injunctions stopping the Biden administration from illegally canceling hundreds of billions of dollars in student debt. This scheme, the Saving on a Valuable Education, or SAVE, Plan, is the latest lawless loan redistribution attempt to fail in court.
Background
President Joe Biden finalized SAVE via an administrative regulation less than two weeks after the Supreme Court struck down his initial attempt at mass student loan cancellation through the HEROES Act. There, Biden had unlawfully attempted to cancel up to $10,000 each for borrowers earning less than $125,000 annually, or up to $20,000 if they had ever received a Pell Grant, a federal need-based aid grant, while in college.
SAVE re-imagined the Department of Education’s income-based repayment plans. Under these plans, borrowers would see their monthly loan payment cut in half, from 10% to 5% of their discretionary income. The program also increased the threshold for income that is exempt from the calculation from 150% to 225% of the poverty line. In addition, borrowers could qualify for loan cancellation in as little as 10 years instead of 20 or more, depending on their loan amounts. The plan also waived accrued unpaid interest.
Under the new SAVE Plan, only 22% of undergraduate borrowers were expected to repay their loans, and it was estimated to cost American taxpayers $475 billion over 10 years.
What Exactly Got Struck Down by the Courts?
The Eastern District of Missouri judge’s order blocked the administration from handing out any additional debt cancellation under SAVE, which means that the administration will no longer be able to accelerate to 10 years its debt cancellation for borrowers with $12,000 or less in loans. Nor can Biden cancel the remaining balance of a borrower’s loan after 20 years of repayment under this reading of the authorizing statute. The debt remains collectible.
The District of Kansas judge’s order prevented the department from implementing another aspect of SAVE: reducing the monthly loan payment from 10% to 5% of a borrower’s discretionary income, which was scheduled to take effect on July 1. The judge’s order also blocked a provision that would have prevented the department from automatically designating borrowers as in default.
Both federal judges found that the department lacked the authority to make significant changes to the income-based repayment plan without explicit authorization from Congress. The Major Questions Doctrine, which helps judges see when an agency has gone far beyond its authority to make major rules without authorization from Congress, played a significant role in both decisions. This doctrine is also what helped stop Biden’s earlier plan at the Supreme Court.
What Remains?
Neither judge’s orders reversed the $5.5 billion already canceled under SAVE, which had been canceled due to the Biden administration implementing some of the SAVE provisions ahead of schedule.
The injunctions also did not affect other provisions of SAVE, such as increasing the income exemption threshold from 150% to 225% of the federal poverty line, excluding spousal income for married borrowers who file taxes separately, or limiting interest accrual. As a result, more than 4 million borrowers will still pay $0 under the SAVE plan while legal action is ongoing.
What Happens Next?
The Biden administration will likely appeal the injunctions, since debt cancellation has been a campaign promise. The future of the SAVE Plan will likely be determined in further court battles and could end up in the Supreme Court. In the meantime, the department is barred from canceling the balances for any additional borrowers under SAVE, a result that should be broadly welcomed by American taxpayers.
Biden should remember that none of his efforts at debt cancellation have offered a systemic answer for the rising cost of college. Instead, subsidizing loans and tuition only encourages more debt and higher tuition.
Moreover, shifting the debt burden from those who willingly took out loans to attend college onto 100 million taxpayers—including the two-thirds of Americans who have not chosen to pursue higher education—is bad policy and bad economics.
Madison Marino is a senior research associate in the Center for Education Policy at The Heritage Foundation.
Reprinted with Permission from The Daily Signal – By Madison Marino
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
So…how much of our money has already gone out to college loan borrowers despite court rulings that say biden can’t do that? I’ve heard that none has been spent like this and other sources saying hundreds of billions already have been spent.
As a hard-working taxpayer, I vehemently object to my tax dollars–any of them–being given away like candy on Halloween. “Trick-or-treat democrats” seems so appropriate for this administration; taxpayers get tricked and the takers are treated to a cheaper college education. Not fair. No one (other than my parents and I) paid my way through school. “Back then”, we had the moral imperative called individual responsibility.
MAGA 2024
Whatever happened to “Your Responsibility”.
Since when has a court ruling that finds a Biden administration act illegal and unconstitutional ever stopped Old Joe and his handlers from ignoring the courts and going full speed ahead? Sorry, but if rulings from the Supreme Court on finding the President lacks the power to unilaterally cancel student loans didn’t stop Old Joe, what makes the author or AMAC think two lowly federal judges essentially deciding the exact same thing will make a difference now? Courts only matter to Democrats when the rulings rubber stamp whatever it is they want to do.
you omitted the word AGAIN from your headline.
Trumps plan is for everyone to keep more of their money while Bidens plan is to take more of everyone’s money and give it to ppl who vote for him.
I sent a bill to the education department asking for my daughter’s money back on the loan she paid off.
Loans are NEVER, EVER forgiven or dismissed! They are only transferred to others! Usually, and especially in this case, taxpayers!
Two federal court judges have to issue injunctions to keep our president from doing something illegal!???
Wow, so that’s where we’re at now huh?
The mere concept of paying the college debt, gets / got my craw. I avoided college, because my parents couldn’t afford to send me, and I was an average student in high school, unable to get scholarships, or work my way through. (I could do one or the other, work or study … not both.). I did later while married take courses at a junior college, and after laid off from a job I worked 19 years, go into debt for an education in graphic design … but paid that off, in full, within three years. (a diploma, not a degree). So the concept of paying off student loans with my tax dollars is just WRONG … and I am totally AGAINST doing it.
What is so hard to understand about this? You take the loan out, you use it for your school, you pay the loan back. It’s not the taxpayers’ fault that you made a bad investment in yourself. You’re a big boy now, buck up and grind out them payments. I did it, my kids did it, so you can too! Just because you got that liberal arts, “Do you want fries with that burger degree” doesn’t make you special.
Thank you courts. Did you watch the debate last week and get the message this guy is a walking disaster?
Well reckon Joe/Obama won’t be buying votes after all. Finally reining in the administrative branch; it’s about time.
so Biden does not need cash to forgive loans – just file the paper work – wow.
I fail to see why tax payers will end up “eating” the money that Joe has already illegally cancelled. He cancelled those loans illegally after SCOTUS told him he had no authority to do it. And he bragged during speeches about ignoring the ruling.
Now, since he did this with no presidential authority, it sounds like this was done on his own, outside the scope of his presidential duties. Based on the new SCOTUS ruling, it seems like he’s open to federal prosecution for those loan cancellations.
This was one of the most unfair things Joe Biten has passed. It is very unfair for taxpayers who could not afford to go to college ( I was one ).We are paying for potential milli onaires on our hourly wage through taxes. Joe needs to find some other way to buy votes .Kick his dumba$$ out.
Accepting they would take the money, sayd, you are selfish, ignorant dweebs. We worked while going to school, took years to pay off and glad to do so, and now, no, no, no!
What has riled me up from the beginning is that my family made tremendous sacrifices to pay for my daughter’s education, but no one is offering to reimburse us, are they? It seems to be a common theme of this dismal administration to reward the irresponsible and punish the responsible. Not OK!!
Just shifting the loan to the taxpayer. He is not teaching students any responsibility. I paid my loan off years ago by working hard and paying it off.
Joe Biden himself took it on to cancel those student loans, so He himself should be responsible for paying them….out of HIS own pocket, after all, he can afford it !!
More good news.
Well, well…score one for the Constitution and one for constitutional law that divides government into branches with separate powers and responsibilities to prevent any one branch from becoming too powerful. Take that Biden and your pro-communist traitors.
Sucker punch the taxpayer and all is well That should get him a few votes if they are not too stoned
Absolutely AGAINST student loan forgiveness. I don’t care about the circumstances. Our son and his wife diligently worked and sacrificed for 9 years to payoff his $150K in Pharmacy School loans, finally becoming debt-free in 2021. It can be done!