TOPEKA, Kan. (AP) — Federal judges in Kansas and Missouri on Monday jointly blocked a large portion of a Biden administration student loan repayment plan which provides a faster path to cancellation and lower monthly payments for millions of borrowers.
The justices’ rulings block the U.S. Department of Education from helping many intended borrowers ease their loan repayment burdens in the future under a rule set to take effect July 1. The decisions do not cancel assistance already provided to borrowers.
In Kansas, U.S. District Judge Daniel Crabtree ruled a lawsuit filed by the state attorney general, Kris Kobachon behalf of his state and 10 others. In his decision, Crabtree allowed parts of the program that allow students who borrowed $12,000 or less to have the remainder of their loans forgiven if they make 10 years’ worth of payments, rather than than the standard 25 years.
But Crabtree said the Department of Education will not be allowed to implement parts of the program designed to help students who had larger loans and could have their monthly payments reduced and their required repayment period reduced from 25 to 20 years.
In Missouri, U.S. District Judge John Ross’ order applies to parts of the program other than Crabtree’s. His order says the U.S. Department of Education cannot forgive loan balances going forward. He said the department could still reduce monthly payments.
Ross issued a ruling in a lawsuit filed by Missouri Attorney General Andrew Bailey on behalf of his state and six others.
Taken together, the two decisions, each handed down by a judge appointed by former President Barack Obama, a Democrat, appeared to greatly limit the scope of the Biden administration’s efforts to help borrowers after the U.S. Supreme Court last year rejected the Democratic president’s first attempt at a pardon. flat. Both judges said Education Secretary Miguel Cardona exceeded the authority granted by Congress in laws dealing with student loans.
Bailey and Kobach hailed their state judge’s ruling as a major legal victory against the Biden administration and argue, as do many Republicans, that forgiving some student loans shifts the cost of repaying them to taxpayers.
“Only Congress has the power over the budget, not the president,” Bailey said in a statement. “Today’s ruling was a huge victory for the rule of law and for every American that Joe Biden was about to force into paying someone else’s debt.”
The White House said it strongly disagrees with the justices’ decisions and will continue to defend the program and use all available tools to provide relief to students and borrowers.
In a statement, White House Press Secretary Karine Jean-Pierre said the Biden administration “will never stop fighting for students and borrowers – no matter how many obstacles Republican elected officials and special interests throw in our path.”
In a statement posted on the social media platform ”.
“Millions of borrowers are now in limbo as they struggle to understand their rights under the law and the information provided by the government and their student loan companies,” said the group’s executive director, Mike Pierce.
In both lawsuits, the plaintiff states sought to invalidate the entire program, which the Biden administration made available for the first time to borrowers in July 2023, and at least 150,000 had their loans cancelled. But the justices noted that lawsuits were not filed until late March in Kansas and early April in Missouri.
“Therefore, the court does not see how plaintiffs can claim irreparable harm caused by them,” Crabtree wrote in his opinion.
Both orders are preliminary, meaning the injunctions imposed by the judges would remain in effect while the separate cases are heard. However, to issue a temporary order, each judge had to conclude that the states would likely prevail at trial.
Kobach framed the Biden plan as “unconstitutional” and an affront to “blue-collar Kansas workers who didn’t go to college.”
There was some irony in Crabtree’s decision: Kansas is no longer a party to the lawsuit brought by Kobach. Earlier this month, Crabtree ruled that Kansas and seven other states in the lawsuit — Alabama, Idaho, Iowa, Lousiana, Montana, Nebraska and Utah — could not demonstrate they had been harmed by the new program and dismissed them as plaintiffs.
That left Alaska, South Carolina and Texas, and Crabtree said they could sue because they each have a state agency that services student loans.
But Crabtree said reducing monthly payments and shortening the period of payments required to obtain loan forgiveness “exceeds any generosity that Congress has previously authorized.”
In the Missouri ruling, Ross said repayment schedules and “are within the purview” of the department, but the “plain text” of U.S. law does not give it authority to forgive loans before 25 years of payments.
Missouri also has an agency that services student loans. The other states involved in the lawsuit are Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.
___ This story has been updated to clarify that while the justices’ joint rulings block much of the Biden plan, some borrowers could still see their loan repayment burdens eased in the future.
