U.S. Appeals Court Blocks Biden’s Student Debt Relief Plan
The SAVE Plan was part of Biden's broader $430 billion debt relief program, which included a promise to cancel up to $20,000 in debt for up to 43 million Americans. This broader initiative was blocked by the U.S. Supreme Court in June 2023.
On Thursday, the 8th U.S. Circuit Court of Appeals in St. Louis granted a request from seven Republican-led states to suspend parts of the U.S. Department of Education’s new debt relief plan, the Saving on a Valuable Education (SAVE) Plan. This decision follows a previous ruling by a U.S. District Judge in St. Louis, which blocked the department from granting further loan forgiveness under the SAVE Plan but did not halt the entire program.
The SAVE Plan, introduced by Biden in 2022, offers more favorable terms than previous income-based repayment plans. It reduces monthly payments for eligible borrowers and forgives debt for those with original principal balances of $12,000 or less after 10 years.
Missouri Attorney General Andrew Bailey, leading the group of state attorneys general, praised the court's decision as a “huge win for every American who still believes in paying their own way.” He criticized the student loan plan for potentially burdening working Americans with significant debt.
In response, an Education Department spokesperson stated that the department is evaluating the ruling's impact and will communicate directly with affected borrowers. The spokesperson affirmed that the department "will continue to aggressively defend the SAVE Plan."
The SAVE Plan was part of Biden's broader $430 billion debt relief program, which included a promise to cancel up to $20,000 in debt for up to 43 million Americans. This broader initiative was blocked by the U.S. Supreme Court in June 2023.
During a visit to Madison Area Technical College Truax Campus in Madison, Wisconsin, Biden announced the SAVE Plan, reinforcing his commitment to student debt relief despite ongoing legal challenges.
