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Judge halts further student loan forgiveness under part of Biden’s debt relief plan

A federal judge on Monday temporarily barred the Education Department from allowing additional loan forgiveness under a key component of President Joe Biden‘s student debt relief plan.

The judge’s order halted the cancellation of federal student loans under the income-driven repayment plan known as SAVE after several states sued over the program.

The Biden administration is “preliminarily enjoined from any further loan forgiveness for borrowers under the Final Rule’s SAVE plan until such time as this Court can decide the case on the merits,” U.S. District Judge John A. Ross wrote.

The SAVE plan came about after the Supreme Court last year rejected the Biden administration’s broader effort to address debt under its pandemic-era relief plan, which aimed to erase up to $20,000 in federal student debt for about 43 million borrowers.

Ross also rejected an effort by the Biden administration to dismiss the case, saying the states that brought the lawsuit had standing and “are likely to succeed on the merits of their argument that the early loan forgiveness provisions … were promulgated in a manner exceeding the Secretary’s statutory authority,” referring to the secretary of education.

Missouri Attorney General Andrew Bailey, representing one of the seven states that brought the lawsuit, lauded the ruling.

“By attempting to saddle working Missourians with Ivy League debt, Joe Biden is undermining our constitutional structure,” Bailey said in a statement. “Only Congress has the power of the purse, not the President. Today’s ruling was a huge win for the rule of law, and for every American who Joe Biden was about to force to pay off someone else’s debt.”

Arkansas Attorney General Tim Griffin said: “With Independence Day fast approaching, another court has reminded President Biden that he is not a king. He can’t go around Congress and unilaterally cancel student loans. He should have learned that from Schoolhouse Rock!”

The other states involved in the lawsuit are Florida, Georgia, North Dakota, Ohio and Oklahoma.

In their lawsuit, the states had asked the judge to declare that the program violated the separation of powers under the Constitution.

Ross said other aspects of the program, such as lowering monthly payments and limiting interest accrual, are benefiting borrowers and can continue, adding that the states that sued “have not shown that these provisions harm them.”

In another blow to the administration’s student debt relief plans, a federal judge blocked the Biden administration Monday from implementing parts of the program that are set to go into effect July 1.

U.S. District Judge Daniel D. Crabtree found that while Kansas and 10 other states that sued over the SAVE plan had not demonstrated irreparable harm from provisions already in effect, they had shown irreparable harm from forthcoming provisions. He granted their request for a preliminary injunction of aspects that have not yet been implemented. His order is set to go into effect Sunday night, allowing time for any appeals.

The 11 states had argued in their March lawsuit that the program violated the Constitution and the Administrative Procedures Act and that many of them suffered losses of state tax revenue because of the plan’s provisions about student loan forgiveness.

White House press secretary Karine Jean-Pierre blasted the court rulings on Monday.

“We strongly disagree with today’s rulings on our SAVE Plan and the Department of Justice will continue to vigorously defend the SAVE Plan,” she said in a statement. “It’s unfortunate that Republican elected officials and their allies have fought tooth and nail to prevent their constituents from accessing lower payments and a faster path to debt forgiveness — and that courts are now rejecting authority that the Department has applied repeatedly for decades to improve income-driven repayment plans.”

In a separate statement, Education Secretary Miguel Cardona added that his department “has relied on the authority under the Higher Education Act three times over the last 30 years to implement income-driven repayment plans.”

The Justice Department declined to comment on the rulings.

The Biden administration has forgiven significant amounts under the SAVE plan. Last month officials announced the approval of an additional $613 million in debt to be canceled for more than 54,000 borrowers under the plan.

The administration said last month that overall, 4.75 million people have benefited from debt cancellation actions and that it had approved $167 billion in loan forgiveness. The figures pertained to all administrative actions, not just the SAVE plan.

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