Supreme Court Blocks Biden's Student Debt Relief Plan

The U.S. Supreme Court dismissed an appeal to revive President Biden's student debt relief plan, backing Republican-led states aiming to block it. The administration's SAVE plan aimed to reduce monthly payments and speed up loan forgiveness. While parts of it took effect, legal challenges continue to unfold.

The U.S. Supreme Court declined on Wednesday to revive President Joe Biden's student debt relief plan, supporting Republican-led states that have sued to block it. The decision denies the administration's bid to temporarily lift a judicial decision that paused the initiative, aimed at lowering monthly payments and hastening loan forgiveness for millions of borrowers.

President Biden's administration, following a Supreme Court decision in June 2023, had initiated the Saving on a Valuable Education (SAVE) plan, deemed the most affordable repayment plan ever. The SAVE plan proposed reducing monthly payments from 10% to 5% of a borrower's discretionary income, potentially saving typical borrowers around $1,000 annually and pausing payments for earners making less than $32,000 per year. It also offered quicker debt forgiveness for smaller loans.

While the administration projected a $156 billion cost over ten years, Republican attorneys general claimed it would amount to $475 billion. Legal challenges have ensued, with some portions of the plan taking effect in February and others in July. Missouri's Attorney General Andrew Bailey praised the Supreme Court's decision, emphasizing that Congress had not authorized the relief plan's substantial economic impact.