Federal Appeals Court Halts Biden's New Student Debt Relief Plan

The 8th U.S. Circuit Court of Appeals has blocked President Biden's administration from implementing parts of a new student debt relief plan aimed at lowering monthly payments. The ruling came after seven Republican-led states requested a halt on the U.S. Department of Education's SAVE Plan.

A federal appeals court on Thursday blocked President Joe Biden's administration from continuing to implement a new student debt relief plan designed to lower monthly payments for millions of Americans. The St. Louis-based 8th U.S. Circuit Court of Appeals granted a request by seven Republican-led states to put on hold parts of the U.S. Department of Education's debt relief plan that had not already been blocked by a lower-court judge.

Last month, U.S. District Judge John Ross in St. Louis had blocked the department from granting further loan forgiveness under the administration's Saving on a Valuable Education (SAVE) Plan but had not blocked all of the plan. The SAVE Plan provides more generous terms than past income-based repayment plans, lowering monthly payments for eligible borrowers and allowing those whose original principal balances were $12,000 or less to have their debt forgiven after 10 years.

Following this, state attorneys general led by Missouri Attorney General Andrew Bailey last week asked the 8th Circuit to block the rest of the SAVE Plan. The court agreed, issuing a one-page order granting an administrative stay.

(With inputs from agencies.)