Biden administration asks Supreme Court to lift latest block on student loan repayment plan

Washington (CNN) — The Department of Education asked the Supreme Court on Tuesday to lift a sweeping new block on President Joe Biden’s student loan repayment plan that aims to slash monthly payments and quicken the path to loan forgiveness.

The request puts fresh pressure on the justices to step into the politically fraught issue of student loan forgiveness a little over a year after the conservative majority struck down Biden’s earlier debt forgiveness plan.

The litigation in two separate cases concerning the plan, known as SAVE (Saving on a Valuable Education), puts the future of one of the Biden administration’s key student loan policies in jeopardy just months before the November election. It also creates uncertainty for students returning to college this month about how they’ll be paying off their loans once they graduate.

The Department of Education already put the SAVE Plan on hold last month due to the ongoing litigation, and the 8 million borrowers enrolled in the repayment plan have been placed in an interest-free forbearance during which they are not required to make monthly student loan payments.

In the case at hand, the Biden administration is asking the Supreme Court to wipe away a unanimous ruling issued Friday by the 8th Circuit Court of Appeals that bars it from moving forward with any further implementation of the SAVE Plan while a legal challenge brought by seven GOP-led states plays out.

It’s the second emergency request concerning the SAVE Plan filed at the high court this summer. Three other Republican-led states asked the court last month to maintain a partial block on the plan while their lawsuit against it continues in lower courts.

“The Eighth Circuit’s injunction has severely harmed millions of borrowers and the Department by blocking long-planned changes and creating widespread confusion and uncertainty,” Solicitor General Elizabeth Prelogar wrote in her emergency request to the high court Tuesday.

“The injunction has forced the Department to place the affected borrowers into temporary forbearance – a result that is unambiguously worse for all involved,” she added.

Prelogar stressed that the lower court’s injunction is so broad that it impacts the Department of Education’s ability to use other student loan programs – which are not at issue in the lawsuit – to cancel student debt.

“That extraordinary injunction has scrambled the Department’s administration of loans for millions of borrowers,” she wrote, adding later that the injunction blocked “the implementation of regulatory provisions that long predate the rule (creating SAVE) and that the States have not properly challenged.”

Prelogar also told the high court that if it decides not to lift the lower-court block on SAVE, the justices should instead agree to review the legality of the plan on an expedited basis this fall.

The Supreme Court has asked the states to respond to the emergency request by August 19.

The 8th Circuit said in its ruling last week that the seven states that brought the challenge to SAVE “have demonstrated at least a ‘fair chance’ that they will ultimately prevail.”

“On initial review, the States have the better of the arguments on these ‘substantial questions of law which remain to be resolved,’” the court said in the unsigned, 10-page ruling.

SAVE is one of the Biden-Harris administration’s key student loan policies. It’s meant to lower enrolled borrowers’ monthly payments and provide a faster path to student debt cancellation. The plan was launched soon after the Supreme Court knocked down Biden’s signature, one-time student loan forgiveness program last summer.

In the separate lawsuit brought by the other group of states, a federal judge sided with the challengers in June, blocking some aspects of SAVE. But a federal appeals court later lifted the block, prompting the states to press the Supreme Court to intervene. That request was filed over a month ago.

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