St. Louis: On Thursday, a federal appeals court halted the implementation of President Joe Biden’s student debt relief plan, which aimed to reduce monthly payments for millions of Americans. 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 debt relief initiative that were not already blocked by a lower-court ruling.
Last month, U.S. District Judge John Ross in St. Louis had prevented the department from granting additional loan forgiveness under the administration’s Saving on a Valuable Education (SAVE) Plan but had allowed other parts of the plan to proceed. The SAVE Plan offers more favorable terms compared to previous income-based repayment plans, including lower monthly payments and debt forgiveness for borrowers with original principal balances of $12,000 or less after 10 years.
Missouri Attorney General Andrew Bailey, leading a group of state attorneys general, sought to block the remaining provisions of the SAVE Plan. The 8th Circuit Court issued a one-page order granting this administrative stay.
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Bailey expressed his support for the ruling on the social media platform X, calling it a “huge win for every American who still believes in paying their own way.” He criticized the plan, stating that it would have burdened working Americans with significant debt.
The Department of Education had no immediate comment on the decision. President Biden introduced the SAVE Plan in 2022 as part of a broader $430 billion initiative that aimed to cancel up to $20,000 in debt for up to 43 million Americans. However, the U.S. Supreme Court blocked this broader program in June 2023.
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The SAVE Plan was scheduled to be fully implemented on July 1, although some aspects had already been in effect. The White House had estimated that over 20 million borrowers could benefit from the plan, with 8 million already enrolled, including 4.6 million whose monthly payments have been reduced to $0. The Education Department reported that it had disbursed $5.5 billion to 414,000 borrowers through the SAVE Plan.
Additionally, a federal judge in Kansas had previously blocked parts of the SAVE Plan, though the Denver-based 10th U.S. Circuit Court of Appeals put part of that decision on hold. Republican-led states have requested the U.S. Supreme Court to reinstate the injunction.
