The Supreme Court has blocked President Joe Biden’s student loan relief program, which would have extended repayment deadlines and effectively forgiven outstanding debts of $12,000 (£9,100) or less.
This was another setback to Biden’s goal of providing comprehensive relief to millions of Americans after the Supreme Court rejected his attempt to cancel up to $400 billion in student loans last year.
Earlier this summer, Republican-led states filed suit to stop the latest program, called Save, arguing that Biden had exceeded his authority.
Lower courts stayed Save’s proceedings while the lawsuits worked their way through the courts, and in an emergency ruling the Supreme Court upheld one of those injunctions.
More than one in ten Americans has federal student loans – and for young voters this is an important election issue.
So far, Biden has approved nearly $150 billion in relief measures affecting nearly five million people – but mostly through executive action rather than Congress.
Mr Biden has touted Save, short for “Saving on a Valuable Education,” as “the cheapest student loan repayment plan ever.”
More than 400,000 participants in the Save program have already had some or all of their debt forgiven, including many low-income borrowers.
In a second phase, payments were to be further reduced starting July 1. This included halving monthly bills for low-income participants.
Republican-led states filed two separate lawsuits this summer arguing that only Congress could pass massive spending plans and that the aid would be “extraordinarily expensive.”
Federal judges then issued preliminary injunctions against Save and indicated that the states would likely succeed in their lawsuits.
In Kansas, U.S. District Judge Daniel Crabtree blocked parts of the Save program that would have lowered monthly payments and adjusted repayment periods for borrowers with loans over $12,000.
In Missouri, U.S. District Judge John Ross barred the Department of Education from forgiving outstanding loans.
But from there, the cases diverged. The 10th Circuit Court struck down the injunction in Kansas, while the 8th Circuit Court upheld the injunction in Missouri.
The states and the Biden administration then filed emergency appeals with the Supreme Court and placed the injunctions on the so-called “shadow list.”
On Wednesday, the court, with a conservative majority, upheld the preliminary injunction in Missouri.
