Federal Court Blocks Biden's New Student Debt Relief Plan

A federal appeals court has blocked President Joe Biden's student debt relief plan, which aimed to lower monthly payments for millions. This decision follows a series of legal challenges by Republican-led states. The plan, already partially implemented, offers more generous repayment terms, helping over 20 million borrowers.

A federal appeals court on Thursday halted President Joe Biden's administration from continuing its new student debt relief plan, aimed at reducing monthly payments for millions of Americans. The 8th U.S. Circuit Court of Appeals in St. Louis granted a request by seven Republican-led states to pause parts of the U.S. Department of Education's debt relief plan that had not been previously blocked by a lower-court judge.

Last month, U.S. District Judge John Ross had stopped the Education Department from granting more loan forgiveness under the administration's Saving on a Valuable Education (SAVE) Plan. While parts of the plan were permitted to continue, Missouri Attorney General Andrew Bailey and others sought to block it completely. The court issued an administrative stay through a one-page order, with Bailey celebrating the ruling as a victory for Americans committed to paying their own way. He argued the plan would burden working Americans with $500 billion in additional debt.

The Education Department has not yet commented. Biden, who introduced the SAVE Plan in 2022, had billed it as a way to cancel up to $20,000 in debt for over 43 million Americans, though it was blocked by the U.S. Supreme Court in June 2023. The SAVE Plan was supposed to take full effect on July 1, with some parts already benefitting over 20 million borrowers. At present, the department has granted $5.5 billion to 414,000 borrowers through the plan, despite recent judicial challenges.