Court blocks student loan forgiveness plan for South Carolina

COLUMBIA, S.C. (WIS) - A U.S. district judge granted South Carolina’s request to temporarily block President Joe Biden’s student loan repayment plan, according to South Carolina Attorney General Alan Wilson.

Several states have filed lawsuits against the Biden istration’s “Saving on a Valuable Education” plan, which is intended to lower student borrowers’ monthly payments and cancel debt. CNN reported the program has canceled $5.5 billion in debt for over 414,000 people.

On Tuesday, the Attorney General’s Office said the court entered an order that stops the Palmetto State from implementing parts of the SAVE plan that were set to take effect on July 1.

“This is a huge win for South Carolina,” said Wilson. “A judge ruled with us in the fight against the Biden istration’s illegal student loan forgiveness. Many families are feeling the daily effects of inflation, and I will continue fighting to ensure others’ student loan payments aren’t put on the backs of taxpayers.”

The states fighting the SAVE plan include Alabama, Alaska, Idaho, Iowa, Kansas, Louisiana, Montana, Nebraska, South Carolina, Texas, Utah, Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.

One of the states’ arguments is that the cancellation of debt for those who have borrowed less than $12,000 and have made 120 monthly payments is “plainly unlawful” under the Constitution and violates the istrative Procedures Act.

The states argue the SAVE plan incentivizes borrowers to “consolidate their loans away from Federal Family Education Loans (FFEL)” which ends up “depriving public instrumentalities of interest income,” according to the memorandum and order concerning the request.

Their case contains the argument that the states’ public instrumentalities not making as much money from FFEL interest is causing what they describe as “irreparable harm.”

Copyright 2024 WRDW/WAGT. All rights reserved.