Biden’s new income-driven repayment plan faces another legal challenge

Higher Ed Dive

Laura Spitalniak

April 11, 2024

Dive Brief:

• Seven Republican-controlled states, led by Missouri, filed a lawsuit in federal court Tuesday against the Biden administration’s new income-driven repayment plan.

• The plan — known as Saving on a Valuable Education, or SAVE — has eliminated or reduced monthly payments for a majority of student loan borrowers who are enrolled, the plaintiff states said. They argued that President Joe Biden and the U.S. Department of Education did not have the authority to enact such a plan and asked the court to halt it.

• Tuesday’s lawsuit is the second state-led action against the SAVE plan in less than a month, throwing further roadblocks in the way of Biden’s student loan agenda.

Dive Insight:

The U.S. Supreme Court last year shot down Biden’s plan to provide broad student debt relief. The ruling dealt a major blow to the president’s student loan agenda, but he promptly vowed to pursue his goal through an alternative pathway.

His new debt relief plan, unveiled this week, relies on a different federal law than his first proposal to lower or erase the student loans of some 30 million borrowers. But the seven states accuse the Biden administration of attempting to further implement widespread debt relief through the SAVE plan, which debuted last year.

The SAVE plan “is not the product of a well-reasoned decision,” the plaintiffs said. “It is a pretext to evade a Supreme Court decision.”

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