A federal appeals court has permanently blocked President Biden's student loan forgiveness initiative, marking the definitive end to the SAVE plan. The 8th Circuit Court of Appeals ruled against the program on Tuesday, agreeing with Missouri Attorney General Andrew Bailey's lawsuit that the Biden administration overstepped its authority. The court determined that the plan, which aimed to erase nearly $500 billion in student loan debt, improperly shifted the burden of repayment from borrowers to taxpayers.
Attorney General Bailey celebrated the decision, emphasizing its importance in preventing future presidents from enacting similar measures. He stressed the need to protect working Americans from being responsible for others' educational debts. While acknowledging that Biden is no longer in office, he highlighted the ruling's significance in establishing a crucial legal precedent.
This court decision follows the Supreme Court's earlier rejection of the Biden administration's request to lift a block on the SAVE plan. A Missouri federal appeals court had previously issued a nationwide injunction, temporarily halting the program while legal challenges proceeded. Despite the Department of Justice's plea for emergency relief, the Supreme Court upheld the block. The White House, at the time, defended the SAVE plan, citing its benefits to millions of borrowers and criticizing Republican officials for opposing it.
The Biden administration introduced the SAVE plan after the Supreme Court struck down his initial student loan forgiveness proposal. The White House touted the SAVE plan's potential to significantly reduce or eliminate monthly payments for many borrowers, with some seeing annual savings of $1,000 or more. Borrowers with an original balance of $12,000 or less would have their remaining balance forgiven after 10 years of payments.
