Biden administration urges Supreme Court to let it continue implementing student loan repayment program
Originally Published: 17 JUL 24 16:39 ET
By Katie Lobosco and Devan Cole, CNN
(CNN) — The Biden administration asked the Supreme Court on Wednesday to let it continue cutting monthly student loan payments for roughly three million borrowers enrolled in a student loan repayment plan implemented last year.
The fate of the program, known as SAVE (Saving on a Valuable Education), is in flux as lower courts consider two legal challenges to it. Earlier this month, a group of three GOP-led states behind one of those challenges asked the high court to maintain a partial block on the program while the states’ larger legal challenge to it unfolds.
A Denver-based appeals court later allowed the Biden administration to move forward with the program, which it began implementing this month. The Biden administration originally began phasing in the student loan repayment plan last year, before it was temporarily paused amid the legal challenges.
Lawyers for the Biden administration told the high court on Wednesday that it should keep in place the order that let the program move forward. They argue that “borrowers would stand to suffer significant and irreparable harm” and many would “experience intense confusion” about the status of their loans if the court blocked the administration from lowering their monthly payments as planned.
Many borrowers have already seen their monthly payments decrease and it would take at least several months for the administration to recalculate them, Solicitor General Elizabeth Prelogar said in court papers.
Prelogar argued that the “widespread harm” that would come to borrowers if the court sides with the states outweighs any harm the states may experience as a result of the program staying in effect while litigation plays out.
“To revert to the pre-SAVE plan approach, the Department and its servicers would have to reprogram their systems, retrain their staff, and recalculate monthly payments,” she wrote, arguing that the Department of Education would also be harmed if the freeze were lifted.
SAVE is one of the Biden administration’s key student loan policies. The Department of Education implemented the repayment plan last year after the Supreme Court struck down the administration’s sweeping, one-time student loan forgiveness program in 2023.
SAVE is currently the government’s most generous student loan repayment plan. Low-income borrowers enrolled in SAVE can see lower monthly payments and a faster path to student loan forgiveness than those enrolled in other repayment plans.
Since SAVE was launched last year, about 8 million people have enrolled and 4.6 million of them have a $0 monthly payment. Currently, those enrolled in SAVE can still benefit from the plan while the lawsuits play out.
But any further student loan forgiveness under the plan has been put on hold by a lower court in a separate case. Under the plan’s rules, borrowers can be eligible for debt forgiveness after making a certain number of payments.
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