WASHINGTON — The Supreme Court on Wednesday rejected a petition from the Biden administration seeking to revive the latest plan to address federal student loan debt.
The court, in a brief order, denied an emergency request by the administration to lift a nationwide injunction imposed by an appeals court. There were no dissents.
The order said the appeals court currently handling the case should “issue its decision with due expediency.”
The Education Department issued a regulation ending its Savings for Valuable Education, or SAVE, plan in July 2023, a month after the Supreme Court ruled that the administration lacked the authority to implement President Joe Biden’s previous loan forgiveness program.
The new effort, like the previous one, was challenged by several conservative-leaning states led by Missouri.
Representatives for the Missouri Department of Education and attorney general did not immediately respond to a request for comment.
The new proposal contains several provisions, including one that would limit the amount that individuals must repay on college loans to 5% of income. Previously, the limit was 10%.
Opponents say it would require spending of up to $475 billion that was not authorized by Congress. They say it should be blocked for the same reason the Supreme Court blocked Biden’s previous plan.
Under the “significant issues” doctrine espoused by the Court’s conservative justices, federal agencies cannot initiate sweeping new policies that have significant economic effects without express authorization from Congress.
The states argued in court papers that the Biden administration’s “assertion of unlimited authority to cancel every penny of every loan is astonishing.”
Other provisions of the new plan would set limits on accrued interest and shorten the repayment period for certain small loans, allowing them to be forgiven later.
The states filed a lawsuit in April seeking to block the plan, and a federal judge in Missouri ruled only that the shortened payment proposal should be put on hold.
But in an Aug. 9 decision, the St. Louis-based Eighth U.S. Circuit Court of Appeals issued a broader injunction suspending other provisions.
In court documents, Attorney General Elizabeth Prelogar said the changes in payment amounts are allowed under a 1993 federal law, which says the Department of Education can determine the “appropriate portion” of income to calculate payment amounts and set payment deadlines.
She said the “extremely broad” appellate court order goes beyond the new plan and blocks implementation of previous changes to repayment terms dating back to 1994, “thus disrupting the established expectations of borrowers who have made payments for years or even decades.”
About 8 million people are already enrolled in the SAVE plan, with other provisions previously in place that have allowed reimbursement amounts to be reduced.
The plan has also been challenged in other courts, and judges have blocked parts of it, but the 8th Circuit’s decision has made those cases less relevant.
For that reason, the Supreme Court on Wednesday rejected a separate request filed by a different group of states challenging the plan.
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