WASHINGTON — The Supreme Court on Wednesday declined to reinstate the Biden administration’s latest student loan forgiveness plan, which aimed to lower payments for millions of borrowers, while legal challenges to the plan proceed in lower courts.
The justices denied a request from the administration to revive the plan, which had been blocked by the 8th U.S. Circuit Court of Appeals.
In an unsigned order, the court indicated it anticipates the appeals court to issue a more comprehensive ruling on the plan “with appropriate dispatch.”
The Education Department is seeking to streamline the loan cancellation process and reduce monthly income-based repayments from 10% to 5% of a borrower’s discretionary income. The plan also proposes that borrowers wouldn’t be required to make payments if their income is below 225% of the federal poverty line — $32,800 a year for a single person.
Last year, the Supreme Court’s conservative majority struck down an earlier plan that would have eliminated more than $400 billion in student loan debt.
Cost estimates for the new plan vary. The Republican-led states challenging the plan estimate the cost at $475 billion over 10 years. The administration cites a Congressional Budget Office estimate of $276 billion.
Two separate legal challenges to the SAVE plan have been moving through federal courts. In June, judges in Kansas and Missouri issued separate rulings that blocked much of the administration’s plan. Debt that had already been forgiven under the plan was unaffected.
The 10th U.S. Circuit Court of Appeals issued a ruling that allowed the department to move forward with a provision enabling lower monthly payments. Republican-led states had sought intervention from the high court to overturn that ruling.
However, after the 8th Circuit halted the entire plan, the states no longer required the Supreme Court’s intervention, the justices noted in a separate order issued Wednesday.
The Justice Department had suggested the Supreme Court could take up the legal battle over the new plan immediately, as it did with the earlier debt forgiveness plan. But the justices declined to do so.