Supreme Court Halts Biden's New Student Debt Relief Plan Amid Legal Battles

The Supreme Court has paused the Biden administration’s new student debt relief plan as lower courts handle multiple lawsuits. The plan aims to ease loan repayments and provide faster debt cancellation. Cost estimates for the program vary, with conflicting figures from the administration and Republican-led states.

The Supreme Court has placed a hold on the Biden administration's latest multibillion-dollar student debt relief plan as multiple lawsuits proceed through lower courts.

The justices declined the administration's request to reinstate most of the plan, which was previously blocked by the 8th US Circuit Court of Appeals. In an unsigned order, the Supreme Court indicated that it expects the appeals court to deliver a more comprehensive decision on the plan "with appropriate dispatch." The Education Department's initiative seeks to offer a quicker route to loan cancellation and reduce income-based monthly repayments from 10 percent to 5 percent of a borrower's discretionary income. Additionally, the plan would eliminate payments for borrowers earning below 225 percent of the federal poverty line, approximately $32,800 a year for a single individual.

Previously, the Supreme Court's conservative majority rejected a plan that would have forgiven over $400 billion in student loan debt. Estimates of the new SAVE plan's cost range from $276 billion, according to the administration's Congressional Budget Office, to $475 billion over ten years, as projected by Republican-led states challenging the plan.

(With inputs from agencies.)