The Supreme Court has halted the Biden administration's latest student debt relief plan, leaving millions of borrowers in uncertainty as the plan faces ongoing legal battles in lower courts.
The Supreme Court has temporarily blocked the Biden administration's latest multibillion-dollar student debt relief plan while it faces ongoing lawsuits in lower courts.
On Wednesday, the Court denied the administration's request to reinstate the plan, which had been halted by the 8th U.S. Circuit Court of Appeals. The unsigned order indicated that the appeals court should expedite its review of the plan.
The proposed plan aimed to cut monthly income-based loan payments from 10% to 5% of a borrower's discretionary income and offer loan cancellation for those earning less than 225% of the federal poverty line, or $32,800 annually for a single individual.
Last year, the Supreme Court rejected a previous plan to erase over $400 billion in student loan debt. The new plan’s cost is debated: Republican-led states estimate $475 billion over 10 years, while the administration cites a Congressional Budget Office estimate of $276 billion.
Current legal challenges include rulings from Kansas and Missouri that blocked parts of the plan, though a provision for lower monthly payments was allowed to proceed by the 10th U.S. Circuit Court of Appeals. After the 8th Circuit's comprehensive block, the Supreme Court noted there was no need for further intervention.
The Justice Department had proposed that the Supreme Court address the new plan now, as it did with the previous one, but the Court declined. Critics, including Mike Pierce from the Student Borrower Protection Center, argue that borrowers are left in limbo without clear rights. Conversely, conservative groups like the New Civil Liberties Alliance support the decision, calling the new plan as unlawful as the previous one.
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