Red States Urge Supreme Court To Halt Biden's Loan Forgiveness Plan

 July 10, 2024

In a significant legal confrontation, conservative states have approached the Supreme Court to block a new federal initiative aimed at student debt relief, Courthouse News Service reported.

These states argue that President Biden's debt relief plan, set to commence in August under the SAVE program, bypasses congressional authority and conflicts with past Supreme Court decisions.

The coalition, led by South Carolina, Alaska, and Texas, filed an emergency application on Tuesday. Their target is the impending launch of the Saving on Valuable Education (SAVE) program, which proposes a new method of calculating student loan payments based on income and family size.

This legal challenge is not the first of its kind. Last year, a similar Biden proposal aimed at forgiving up to $20,000 per borrower was struck down by the Supreme Court in a 6-3 decision.

Legal Battle Over Student Loan Relief Intensifies

The SAVE plan offers potential debt cancellation for loans under $12,000 after a decade of payments, a point of contention for the suing states. They believe this program could lead to substantial financial loss for taxpayers.

In March, a group of 11 states sought to halt the program through a federal court in Kansas. However, only three states were deemed to have sufficient standing to continue the legal proceedings.

Following a preliminary injunction against the SAVE program by a lower court, the Department of Education requested the 10th Circuit Court to pause this injunction. This court action temporarily stopped payments and interest accrual for about 3 million borrowers.

Supreme Court's Decision Critical for Federal Student Loan Policies

The crux of the conservative states' argument lies in the major questions doctrine. This legal principle mandates congressional approval for significant policy shifts, which the states assert has been bypassed.

Joseph Spate, South Carolina's assistant deputy solicitor general, has been vocal about the administration's alleged overreach. "Due to the administration’s intransigence, the court must unfortunately step in again," he remarked in a recent filing.

He also highlighted the fiscal implications of the SAVE program, suggesting it could lead to the unauthorized cancellation of nearly half a trillion dollars in student debt.

States Challenge Legality of Biden's Debt Relief Strategy

The legal submissions by the states emphasize the program's potential cost to the public purse—hundreds of billions of dollars. They argue that this far exceeds the scope of the previously rejected plan and necessitates judicial review.

"This current attempt to unilaterally cancel debt is every bit as unlawful as the first 12-digit effort this court rejected in Nebraska," Spate added in his filings.

The states are pressing the Supreme Court to not only consider their appeal but to potentially vacate the program in its entirety or at least hear arguments during the next term.

Urgent Supreme Court Review Sought by Conservative States

The urgency of this matter is underscored by the state's request for a Supreme Court decision by the end of the month. This timeline highlights the immediate financial and administrative impacts they anticipate should the program proceed.

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