Editorial: Heavy balance -- Student loan forgiveness suffers another court defeat

A federal appeals court last week issued a one-sentence order granting an effort by Missouri and several other states to block the Biden administration’s Saving on a Valuable Education (SAVE) student loan forgiveness program, dealing yet another blow to the president’s push to help millions of Americans crushed by the burden of high-interest educational loans they often signed onto as teenagers.

The court’s order provides no specific rationale for issuing the emergency stay, which is a stopgap while the plaintiffs seek an injunction, which itself is short of a final ruling. Why the legal acrobatics? An uncharitable explanation would be that the courts seem keen on derailing one of Biden’s signature promises in advance of the November election.

This is after the U.S. Supreme Court struck down a separate forgiveness program that had relied on a clear congressionally-granted authority for the federal government to forgive student loans, forcing the White House and the Department of Education to keep increasingly limited parts of their debt relief program.

This surviving SAVE effort, which a federal judge had already whittled down, wasn’t even wholesale forgiveness, but a measure to lower monthly payments and allow certain borrowers who’d had a debt load of $12,000 or less forgive their remaining loans after a decade of making regular payments. Many of these borrowers are people who went to affordable schools, as they had been encouraged to do, or didn’t even finish their degrees altogether, saddling them with debt without any of the benefits.

Stopping the program in its tracks is not a decision with merely hypothetical consequences. Some 8 million people had already enrolled in the program, with more than 4 million already having a monthly payment of zero. These are real people whose financial situation will get measurably worse now that the program’s been struck down.

Moreover, enrollees have likely already factored the impact of the program into future financial decisions. Debt and student debt in particular is often cited as a reason that people delay getting married, starting families, buying houses and launching businesses. Student debt at its current level is bad for the economy and bad for our society.

That doesn’t mean that the government must wipe the slate clean entirely. It doesn’t necessarily make much sense to zero out the balance of a high-earning law school graduate, who made the calculus to take on a significant amount of debt in exchange for the promise of a big payout, though it must be acknowledged that this debt tends to dissuade students from more public-minded professional aspirations. That’s why SAVE and other proposals are tailored to the circumstances of individual borrowers.

We hope that the public service forgiveness program that Biden announced on the same day as his court defeat will be allowed to move forward as planned. Workers like nurses, teachers and others who make us all better off should get the chance to move forward with their lives without being punished for devoting themselves to public-spirited lives.

In any case, this type of forgiveness has been authorized for more than 15 years; the only thing Biden is doing is making it actually work instead of leaving eligible borrowers in the lurch. With this judiciary, though, you never know.

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