Despite Orders Temporarily Blocking Lower Student Loan Payments and Forgiveness, no Court has Weighed in on the Legality of the Decades-Old Law Used to Deliver Debt Relief
August 26, 2024 | WASHINGTON, D.C. — Student Borrower Protection Center (SBPC) filed an amicus curiae brief in the U.S. Court of Appeals for the 8th Circuit, supporting the U.S. Department of Justice in its effort to restore access to affordable loan payments for millions of working people with student debt.
A copy of the amicus curiae brief filed by SBPC is available here: https://protectborrowers.org/24-2332_missouri-v-biden_sbpc-amicus-brief/
Earlier this summer, the 8th Circuit issued an order temporarily blocking—in its entirety—the Biden-Harris Administration’s signature Income-Driven Repayment (IDR) plan, known as the Saving on a Valuable Education (SAVE) Plan. The order also blocked aspects of other long-standing IDR plans on which millions of borrowers rely. This radical action builds on an earlier order by a federal judge in the Eastern District of Missouri that temporarily blocked all debt cancellation under the SAVE plan.
In the brief, SBPC argues that the courts erred in these decisions to halt critical avenues of debt relief and that, in effect, the orders cause sweeping, long-term harm to millions of people in a ham-fisted effort to protect the private profits of a single student loan company—MOHELA.
From the brief:
“The financial and social maelstrom that has befallen millions of borrowers makes plain the overwhelming harm to the public caused by the multiple overlapping–and in some cases conflicting–injunctions to the final Rule. As described above, the consequences to borrowers far outweigh the speculative and tenuous harms to the Plaintiffs, which are indirect by means of an unsubstantiated harm to MOHELA.”
The brief argues that by upsetting the status quo—borrowers’ ability to select from several repayment plans the one that best meets their needs—the court orders failed to properly account for the foreseeable chaos and uncertainty that the nearly 8 million borrowers already enrolled in the SAVE plan would experience, and for the approximately 14 million borrowers who will need to select a plan in the coming weeks if they want to avoid default. These borrowers range from recent graduates entering repayment for the first time, to borrowers who have struggled to make payments since payments resumed last fall and have relied on the federal government’s on-ramp period, to borrowers already in default seeking to re-enter repayment through the Fresh Start program. As the brief explains, the courts failed to take the breadth of their orders’ foreseeable impacts into account.
Further Reading
SBPC blog on 18-state attack on SAVE: The Biden Administration’s Latest Effort to SAVE Borrowers and the States that are Hell-Bent to Stop It
SBPC press release on Eighth Circuit ruling: Eighth Circuit Bows to Right-Wing Politicians, Wreaking Havoc on Student Loan System by Blocking President Biden’s SAVE Plan
May 2024 comment supporting student debt relief—which includes a cover letter that spotlights 15 borrower stories, and a petition signed by 22,337 borrowers and nearly 5,000 individual borrower testimonials: See Here
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.