A federal appeals court blocked President Biden’s plan to forgive nearly $500 billion in student debt, putting the administration’s move on hold while litigation plays out.
The 8th U.S. Circuit Court of Appeals issued a one-page order Thursday blocking the Biden administration from implementing the Savings on Valuable Education plan.
Other courts previously had halted parts of the SAVE rule, though the administration had begun processing some aspects of it.
Arkansas, Florida, Georgia, Missouri, North Dakota, Ohio and Oklahoma, all red states, had asked the appeals court to pause any further implementation while they challenged the president’s plan, saying it was an end-around of his first failed effort to forgive student debt.
Under the SAVE rule, student loan borrowers would be able to shield more of their income that is calculated when determining monthly payments, reduce the number of years to qualify for loan forgiveness and not have to pay part of the accrued interest.
The ruling comes the same day that the Biden administration announced another round of student loan forgiveness, this time totaling $1.2 billion in forgiveness for roughly 35,000 borrowers who are eligible for the Public Service Loan Forgiveness program.
The program, which provides relief for teachers, nurses, firefighters and other public servants who make 120 qualifying monthly payments, was passed in 2007. But for years, borrowers ran into strict rules and servicer errors that prevented them from having their debt canceled. The Biden administration adjusted some of the program’s rules and retroactively gave many borrowers credits toward their required payments.
In 2022, the Supreme Court shut down a prior attempt by Mr. Biden to alleviate student loan debt, ruling the government couldn’t forgive some loans for borrowers making under $125,000 or $250,000 as a married couple.
The high court’s 6-3 ruling said the executive branch — specifically, the secretary of education — doesn’t have the authority to waive student debt.
Three other conservative-led states — Alaska, South Carolina and Texas — asked the Supreme Court to block the SAVE plan in a filing earlier this month.
Lower courts in Kansas and Missouri sided with states challenging the president’s newest move, issuing an injunction against parts of its implementation.
But the administration took the Kansas decision to the 10th U.S. Circuit Court of Appeals, which lifted that injunction, giving the administration a partial green light to start implementing the plan.
The red states’ filing pending before the high court seeks to reimpose that injunction.
• This article is based in part on wire service reports.
• Alex Swoyer can be reached at aswoyer@washingtontimes.com.
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