A federal appeals court on Thursday blocked President Joe Biden’s administration from implementing its student debt relief plan, the SAVE Plan, dealing another blow to the administration’s efforts to ease the burden of student loans for millions of Americans. The 8th U.S. Circuit Court of Appeals granted a request by seven Republican-led states to halt the plan, which aimed to lower monthly payments and potentially forgive debt for borrowers. The court’s decision follows a previous ruling by a lower court that had blocked certain aspects of the SAVE Plan.
The SAVE Plan, announced in 2022, is designed to make student loan payments more affordable by offering more generous terms than previous income-based repayment plans. It would have lowered monthly payments and potentially forgiven debt after 10 years for borrowers with initial balances of $12,000 or less. However, the plan has faced legal challenges from Republican-led states who argue it is financially unsustainable and unfair to taxpayers.
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The 8th Circuit’s ruling marks another setback for the Biden administration’s student debt relief efforts, following the Supreme Court’s decision in June to block a separate $430 billion student debt forgiveness program. The administration is likely to appeal the latest ruling, but the legal battle over student debt relief is likely to continue.