In decisions that were coincidentally well-timed, two federal judges separately issued preliminary injunctions blocking the Biden administration’s plan to ease student loan burdens. The rulings, delivered on Monday by Judges Daniel D. Crabtree of the District Court for the District of Kansas and John A. Ross of the District Court for the Eastern District of Missouri, challenge the administration’s authority to implement broad student loan forgiveness without explicit Congressional approval.
The two suits were filed in April, accusing the federal government of overreaching in the student loan arena.
The Background: The federal government last year announced the launch of a new initiative called the Saving on a Valuable Education (SAVE) program. Under the plan, individuals who are making less than $15 per hour will not have to make any payments on their student loans and those making more than that will save more than $1,000 per year compared to other income-driven repayment programs, according to the Department of Education. As long as individuals continue to make their payments, the balances on the unpaid debt will never increase because the payments are not covering the interest that is accruing on the debt.
Kansas Ruling: A Broad Injunction
Judge Crabtree’s ruling in Kansas focused on the legal and economic implications of the SAVE Plan, invoking the “major questions doctrine.” He argued that the transformative nature of the plan required clear congressional authorization, which he found lacking. Crabtree granted a preliminary injunction, halting the implementation of yet-to-be-enacted portions of the SAVE Plan nationwide. He emphasized that his ruling did not apply to elements already in effect, acknowledging the complexity and potential irreparable harm involved in unwinding these aspects.
Missouri Ruling: A Targeted Approach
In Missouri, Judge Ross took a more targeted approach, limiting his injunction to the loan forgiveness component of the SAVE Plan. Ross expressed skepticism regarding the states’ ability to prove substantial harm from reduced loan payments, but he acknowledged the standing of the Missouri Higher Education Loan Authority, which argued that forgiving loans it serviced would financially harm the state. Ross’s decision underscores the ongoing legal debate over the extent of executive power in implementing widespread debt relief.
“Today two different gangs of right-wing Attorneys General got exactly what they were looking for from federal judges in Kansas and Missouri: a recipe for chaos across the student loan system,” said Mike Pierce, the Executive Director of the Student Borrower Protection Center, in a statement. “Millions of borrowers are now in limbo as they struggle to make sense of their rights under the law and the information being provided by the government and their student loan companies. Are borrowers’ bills accurate? Are interest charges correct? Will the amount due today be the same due tomorrow? Will borrowers promised cancellation still receive critical relief? These basic, essential questions have no answers.”
