The Biden administration’s student loan forgiveness efforts have hit another roadblock, potentially throwing millions of borrowers into financial uncertainty.
On Thursday, a federal appeals court temporarily blocked a key component of President Biden’s student debt relief plan, known as the Saving on a Valuable Education (SAVE) program.
SAVE was designed to subvert last year’s Supreme Court decision, offering borrowers lower payments and new paths to loan forgiveness. But Republican-led states have challenged its legality, arguing that the administration overstepped its authority.
The latest ruling comes from the 8th Circuit Court of Appeals, which issued a brief order that appears to block the entire SAVE program. This goes beyond a previous lower court decision that only halted parts of the plan.
“Appellants’ emergency motion for an administrative stay prohibiting the appellees from implementing or acting pursuant to the Final Rule until this Court rules on the appellants’ motion for an injunction pending appeal is granted,” the court stated in its one-line order.
JUST IN: The Court granted our emergency motion to BLOCK Joe Biden’s entire illegal student loan plan, which would have saddled working Americans with half-a-trillion dollars in Ivy League debt.
HUGE win for every American who still believes in paying their own way.
— Attorney General Andrew Bailey (@AGAndrewBailey) July 18, 2024
This development is part of a larger pattern of legal challenges to Biden’s student loan policies. Last year, the Supreme Court struck down his broader $10,000 student debt cancellation plan. Now, even his scaled-back efforts are facing significant hurdles.
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The SAVE program’s blockage could have far-reaching consequences. Mike Pierce, Executive Director of the Student Borrower Protection Center, warned on social media that the court’s action “will cause mass chaos” for borrowers.
[BREAKING] The 8th Circuit temporarily blocked President Biden's signature SAVE income-driven repayment plan in full.
The unsigned, single-sentence order is extreme and will cause mass chaos.@POTUS has no choice but to suspend student loan payments.https://t.co/59BpdQNcgi pic.twitter.com/KinltVRcds
— Mike Pierce (@millennial_debt) July 18, 2024
Indeed, the Biden administration itself has cautioned about the potential fallout. In arguments to the Supreme Court, officials stated that blocking any part of SAVE could cause “widespread harm” to borrowers. They explained, “To revert to the pre-SAVE plan approach, the Department and its servicers would have to reprogram their systems, retrain their staff, and recalculate monthly payments.”
While the administration’s concern for borrowers is evident, critics argue that these repeated attempts at loan forgiveness are misguided. They contend that it’s not the president’s role to forgive student debt, especially after the Supreme Court’s clear ruling on the matter. Such decisions, they say, should be left to Congress.
Moreover, opponents of loan forgiveness point out that it’s unfair to those who have already paid off their loans or chose not to take on debt for their education. There’s also the question of fiscal responsibility, with the national debt already exceeding $34.9 trillion.
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Looking ahead, it’s likely that the Supreme Court will once again be called upon to weigh in on student loan forgiveness. With conflicting rulings from different federal circuit courts, the nation’s highest court may ultimately determine the future of student debt relief.
