The Supreme Court has kept a block on President Joe Biden’s student-loan relief program that would extend payment periods and effectively forgive outstanding debts of $12,000 (£9,100) or less.
It was another blow for Mr Biden’s goal of providing sweeping relief to millions of Americans after the Supreme Court struck down his attempt to cancel as much as $400bn in student loans last year.
Earlier this summer, Republican-led states sued to stop the latest program, known as Save, saying Mr Biden had overstepped his authority.
Lower courts put Save on pause while the lawsuits worked their ways through the courts, and in an emergency ruling the Supreme Court backed one of those injunctions.
More than one in 10 Americans hold federal student debt – and it has been a major election issue for young voters.
To date, Mr Biden has approved nearly $150bn in relief affecting close to five million people – but largely through executive actions, and not via Congress.
Mr Biden has touted Save, which stands for “Saving on a Valuable Education”, as “the most affordable student loan repayment plan ever”.
More than 400,000 Save participants have already seen some or all of their debts cancelled, including many low-income borrowers.
A second phase was due to further reduce payments from 1 July. That included halving monthly bills for low-income participants.
Republican-led states filed two separate lawsuits this summer, saying that only congress can enact massive spending plans and that the relief would be “extraordinarily expensive”.
Federal judges then issued injunctions against Save and indicated that the states would probably succeed in their lawsuits.
In Kansas, US District Judge Daniel Crabtree blocked parts of Save intended to reduce monthly payments and adjust payment periods for borrowers with loans larger than $12,000.
In Missouri, US District Judge John Ross prevented the education department from forgiving loan balances.
But from there the cases diverged. The 10th Circuit court lifted the Kansas injunction, while the 8th Circuit court kept the Missouri injunction in place.
The states and the Biden administration then filed emergency petitions to the Supreme Court, putting the injunctions on what is commonly called the “shadow docket”.
On Wednesday, the conservative-majority court upheld the Missouri injunction.
