Chaos-Causing Court Sides With GOP Attack on Biden Student Debt Relief Plan

Student debt cancellation advocates on Thursday responded to a federal appeals court blocking implementation of one of U.S. President Joe Biden's relief programs by demanding a shutdown of the whole system to spare borrowers and the economy.

The U.S. Court of Appeals for the 8th Circuit's temporary ruling against the administration's Saving on a Valuable Education (SAVE) plan comes just over a year after the Supreme Court struck down Biden's sweeping student debt cancellation proposal.

Although the high court's right-wing supermajority has thwarted Biden's attempt to deliver his promised broad relief, the administration has pursued initiatives including the SAVE program, which sets monthly payments based on borrowers' income.

Over half of the more than 8 million borrowers who have enrolled in the program have a $0 monthly payment, according to the U.S. Department of Education. SAVE also enables borrowers to have their balances canceled after 10, 20, or 25 years.

GOP state officials led by Kansas Attorney General Kris Kobach challenged the program, leading to Thursday's ruling—just the latest in a series of various decisions about the program. The 8th Circuit issued a stay until the court rules on a request for a preliminary injunction.

"Today's extreme, unsigned, single-sentence order from a judge out of Missouri's 8th Circuit Court of Appeals just sent the student loan system into chaos and borrowers will be forced to pay the price," warned Student Borrower Protection Center (SBPC) executive director Mike Pierce in a statement.

"It is clear that the Biden administration can and must protect borrowers from this partisan lawfare—that means shutting the student loan system down until borrowers have access to the rights they were promised under the law," he argued.

In addition to echoing Pierce's call for shutting down the system "to mitigate the widespread economic harm that could be imposed on borrowers," SBPC deputy executive director Persis Yu suggested the legal battle was politically motivated.

"Right-wing politicians are using the courts to wreak havoc on the student loan system and put the economic stability of tens of millions of borrowers and their families at risk. Make no mistake: These lawsuits are shameful political gamesmanship designed to hurt President Biden at all costs, and borrowers are merely collateral damage," Yu said. "Unfortunately, today, the special interests have prevailed, imperiling the financial security of millions and throwing the student loan system into an untenable chaos."

An Education Department spokesperson said in a statement Thursday that "we are assessing the impacts of this ruling and will be in touch directly with borrowers with any impacts that affect them."

"Our administration will continue to aggressively defend the SAVE Plan," the spokesperson added. "And, we won't stop fighting against Republican elected officials' efforts to raise costs on millions of their own constituents' student loan payments."

The 8th Circuit's decision came on the same day as the Biden administration's announcement that it is canceling $1.2 billion in student loans for borrowers who work in public service through changes to another federal program.

"These 35,000 borrowers approved for forgiveness today are public service workers—teachers, nurses, law enforcement officials, and first responders who have dedicated their lives to strengthening their communities, and because of the fixes we made to Public Service Loan Forgiveness, they will now have more breathing room to support themselves and their families," Biden said in a statement.

Biden—who has faced progressive pressure to keep pursuing bolder debt relief policies—is currently seeking reelection, though the Democrat has endured growing calls to step aside since his poor debate performance last month.

Former President Donald Trump this week formally became the Republican nominee and announced Sen. JD Vance (R-Ohio) as his running mate. Multiple analyses have warned that the U.S. student debt crisis would worsen under Trump.