11 states sue to stop Biden’s new income-driven repayment plan

Higher Ed Dive

Lilah Burke

March 29, 2024

Dive Brief:

• Eleven states are suing the U.S. Department of Education and President Joe Biden to stop implementation of the administration’s new income-driven repayment plan, called Saving on a Valuable Education, or SAVE.

• The president and the department do not have the authority to change the terms of loans, the states said in a federal court document filed Thursday. Some of the plaintiffs said they will see a decrease in tax revenue because of the plan.

• The suit is just the latest roadblock to Biden’s student loan agenda. Broad-based debt relief, the marquee item in his plan, has already been scuttled by a 2023 U.S. Supreme Court ruling.

Dive Insight:

The eleven states bringing the suit are Alabama, Alaska, Idaho, Iowa, Kansas, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah. The states are mostly led by Republicans.

A Education Department spokesperson said Friday the agency would not comment on pending litigation.

However, the department said Congress gave the agency the authority to define the terms of income-driven repayment plans in 1993, and the implementation of the SAVE plan is the fourth time it has used that authority.

“The Biden-Harris Administration has been fighting to fix a broken student loan system, and part of that is creating the most affordable student loan repayment plan ever that is lowering monthly payments, protecting millions of borrowers from runaway interest and getting borrowers closer to debt forgiveness faster,” the spokesperson said via email.

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