Court Halts Biden's Ambitious Student Debt Relief Plan

A U.S. appeals court blocked the Biden administration's student debt relief plan, citing lack of authority under the Higher Education Act. The ruling comes as a setback in Biden's attempts to reform the student debt system. The Supreme Court had previously halted his extensive debt cancellation initiative.

A U.S. appeals court ruled against a student debt relief initiative by former President Joe Biden's administration on Tuesday. The decision determined that the administration exceeded its authority as outlined in the Higher Education Act. The court's ruling was delivered by St. Louis-based 8th U.S. Circuit Court of Appeals, siding with Republican-led states.

According to U.S. Circuit Judge L. Steven Grasz, the Education Department misinterpreted the Act's provision, which was intended for income-based repayment plans rather than large-scale debt forgiveness. The proposal, known as Biden's SAVE Plan, sought to lower monthly payments and shorten the debt forgiveness timeline.

This legal setback follows a previous Supreme Court judgment in 2023 that rejected an attempt to erase $430 billion in student loans. The White House, under Biden's administration, continues to tackle the persistent issue of student debt through different strategies.

(With inputs from agencies.)