Three Republican-led states, South Carolina, Alaska, and Texas, have filed an emergency appeal with the Supreme Court to halt a Biden administration initiative aimed at reducing monthly payments for millions of student loan borrowers. The program in question, known as Saving on a Valuable Education (SAVE), was introduced last year to lower enrolled borrowers' monthly payments and expedite debt forgiveness.
The Biden administration launched the SAVE program following the Supreme Court's decision to strike down a broader student loan forgiveness program. The recent appeal by the states challenges the legality of the program and seeks to prevent its implementation.
After a federal appeals court in Denver allowed the program to proceed, the issue of student loan relief, a significant campaign promise by President Biden, is once again brought before the conservative-leaning Supreme Court.
SAVE currently has nearly 8 million enrollees, with approximately 3 million borrowers expecting reduced payments as of July 1. The Department of Education had initially placed those 3 million borrowers in forbearance while the program was being litigated. However, following the appeals court's ruling in favor of the administration, the Department of Education can now move forward with implementing the payment reductions.
The program calculates monthly payments based on a borrower's income and family size, irrespective of the total debt amount. Around 4 million borrowers under SAVE have a $0 monthly payment.
While two groups of Republican-led states had previously challenged the program in lawsuits, the current case before the Supreme Court involves a district court's temporary block on the program's implementation, which was later paused by the 10th US Circuit Court of Appeals.
The Supreme Court is expected to review the emergency appeal and may decide on whether to block the SAVE program in the coming weeks. The Department of Education has not yet commented on the appeal.
