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The Biden administration's student debt relief plan, known as the Saving on a Valuable Education (SAVE) program, has been blocked by the 8th Circuit Court of Appeals. The court granted a motion for an administrative stay filed by a group of Republican-led states seeking to invalidate the entire student loan forgiveness program. The court's order prevents the administration from implementing parts of the SAVE plan that were not already blocked by lower court rulings.
The SAVE plan aimed to lower monthly payments for millions of borrowers. The ruling comes on the same day that the Biden administration announced another round of student loan forgiveness, totaling $1.2 billion for approximately 35,000 borrowers eligible for the Public Service Loan Forgiveness (PSLF) program. The PSLF program provides relief for public servants, such as teachers, nurses, and firefighters, who make 120 qualifying monthly payments.
"Today’s ruling from the 8th Circuit blocking President Biden’s SAVE plan could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect," said Education Secretary Miguel Cardona.
Borrowers enrolled in the SAVE plan will be placed into interest-free forbearance while the case works its way through the legal system. The Education Department is currently reviewing the ruling. The administration has vowed to continue defending the SAVE Plan, which has already helped over 8 million borrowers access lower monthly payments.