PRESS RELEASE: DFI Urges Supreme Court to Stop Biden’s Latest Student Loan Cancellation Scheme

WASHINGTON—The Defense of Freedom Institute for Policy Studies (DFI) today called on the U.S. Supreme Court to stop the Biden administration’s latest student loan cancellation scheme, “Saving on a Valuable Education” (SAVE).

In an amicus brief filed in Alaska v. U.S. Department of Education, DFI argues SAVE is illegal because the Education Department failed to consider public comments by DFI and others about the vast cost ($475 billion over ten years) of the plan. The brief also contends that SAVE is illegal because the administration relies on income-driven repayment provisions of the Higher Education to cancel student loans.

The district court preliminarily enjoined major parts of SAVE from going into effect. The 10^th Circuit Court of Appeals recently stayed that decision, allowing much of the SAVE loan cancellation scheme to proceed. Alaska, South Carolina, and Texas have petitioned the Supreme Court to hear the case and direct the Biden administration to halt SAVE.

“SAVE is a student loan cancellation plan masquerading as a loan repayment plan. Congress has never authorized the Education Department to create a $475-billion student loan bailout program,” said DFI President and Co-Founder Bob Eitel. “More than that, the Department’s refusal during rulemaking to consider and respond to DFI’s comment analyzing the agency’s failure to account for the cost of SAVE is a fatal defect that compels the Department to start the rulemaking process all over again.”  

The brief, filed jointly with the New Civil Liberties Alliance, the Cato Institute, and the Mackinac Center for Public Policy, notes that DFI provided the Education Department with an analysis during the public comment period that the cost estimate for the agency’s SAVE plan was off by over $300 billion. Rather than consider all of the costs of the plan, as requested by DFI, the Department instead violated federal law when it ignored DFI’s cost analysis in its rush to get the plan out the door.  

The brief also states that the 1993 Higher Education Act Amendments “do not authorize SAVE” and that the law “merely allows the Department to establish repayment plans over a longer period so individual monthly payments could be smaller for lower-income borrowers. Nothing in the 1993 HEA Amendments’ text nor legislative history suggests Congress granted the Department discretion to design plans like SAVE that prioritize the cancellation of loans instead of their repayment.”

To read the full brief, click here.

DFI continues to be at the forefront of exposing and stopping the Biden administration’s student loan cancellation schemes. In the landmark Biden v. Nebraska case argued before the Supreme Court, DFI teamed up with five former Secretaries of Education—Betsy DeVos, Margaret Spellings, Rod Paige, Lamar Alexander, and William Bennett—to submit a brief explaining why Biden’s plan to forgive student loans using emergency powers was unconstitutional and illegal. Siding with the arguments in our brief, the Supreme Court struck down the president’s mass student loan debt cancellation program. Last January, DFI’s Bob Eitel highlighted the legal issues with President Biden’s SAVE regulations and encouraged state Attorney General offices to challenge the program.