The Supreme Court has declined to reinstate the Biden administration’s student debt forgiveness program, known as the SAVE plan, which was blocked by the U.S. Court of Appeals for the 8th Circuit. The plan is an income-driven repayment plan that aims to provide relief to millions of borrowers by lowering monthly payments based on their income. The Education Department paused loan payments for borrowers enrolled in the program due to ongoing legal challenges from GOP-led states.
Critics argue that the cost of the SAVE plan is higher than the administration estimates, claiming it could reach $475 billion when factoring in debt from a previous loan forgiveness proposal invalidated by the Supreme Court. Multiple states have filed lawsuits challenging the provisions of the program, leading to injunctions blocking its implementation. The Biden administration has appealed these rulings but has stopped canceling loans for borrowers affected by the injunctions.
The 8th Circuit’s decision to block the program has been criticized by the Biden administration, as it contradicts a ruling from the U.S. Court of Appeals for the 10th Circuit that kept the SAVE plan intact during legal proceedings. The administration argues that the injunction is causing confusion and harm to borrowers who were promised loan forgiveness under the program. However, the seven states challenging the program, led by Missouri, accuse the administration of overreach and claim that it is effectively forgiving loans for many borrowers, contrary to the Higher Education Act.
President Biden campaigned on a platform of student debt relief and has implemented various initiatives to address the issue. The Department of Education estimates it has forgiven $168 billion in debt for over 4.7 million borrowers, providing relief to a significant portion of federal borrowers. However, legal challenges and court rulings have hindered the administration’s efforts to provide broader student debt relief, leading to uncertainty for millions of borrowers.
