Federal Appeals Court Blocks All Remaining Parts of SAVE Student Debt Relief Plan

The appeals court ruling was handed down a day after President Joe Biden announced another $1.2 billion in debt forgiveness for 35,000 student borrowers.

Education Secretary Miguel Cardona (right) looks on as President Joe Biden delivers remarks on the student debt relief portal beta test, in the South Court Auditorium of the Eisenhower Executive Office Building, next to the White House in Washington on Oct. 17, 2022. Brendan Smialowski/AFP via Getty Images

A federal appeals court has issued an order that blocks all remaining parts of the federal government’s Saving on a Valuable Education (SAVE) student debt relief plan that weren’t blocked by an earlier lower-court ruling.

In a brief unsigned order entered into the record on July 18, the St. Louis-based 8th U.S. Circuit Court of Appeals granted a request by a coalition of seven Republican-led states led by Missouri to block all remaining active parts of the Education Department’s SAVE plan, which aims to lower student loan payments and forgive debts.

Last month, U.S. District Judge John Ross in St. Louis blocked the Education Department from granting any further loan forgiveness under the SAVE plan but declined to block all of the program.

In response, the White House vowed to appeal the ruling blocking parts of the student debt relief plan, while Missouri Attorney General Andrew Bailey led a coalition of state attorneys general to petition the 8th Circuit to freeze the remainder of it.

The court sided with Mr. Bailey and the others, granting their emergency motion for an administrative stay that temporarily halts the implementation of the entire SAVE debt relief plan until the court decides on a longer-term injunction while the appeal is ongoing.

Reacting to the favorable ruling, Mr. Bailey took to X to praise the decision as a “huge win for every American who still believes in paying their own way.” He said the student loan plan “would have saddled working Americans with half-a-trillion dollars in Ivy League debt.”

The Education Department did not immediately respond to a request for comment from The Epoch Times.

However, in response to an inquiry at an earlier stage of litigation of the SAVE Plan, an Education Department spokesperson told The Epoch Times in an emailed statement that the program is part of the Biden administration’s effort to “fix a broken student loan system,” which involves creating a student loan repayment plan ever that lowers monthly payments, protects millions of borrowers from high-interest payments, and accelerates their path toward debt forgiveness.

“The Biden-Harris Administration won’t stop fighting to provide support and relief to borrowers across the country—no matter how many times Republican elected officials try to stop us,” the spokesperson said.

The appeals court ruling was issued a day after President Joe Biden announced another $1.2 billion in debt forgiveness for 35,000 student borrowers under a different plan called the Public Service Loan Forgiveness Program (PSLF). The PSLF program supports employees of government or not-for-profit organizations and public servants, such as teachers, nurses, and firefighters.

The SAVE program, which is an income-driven repayment plan that forgives a portion of student debt based on the borrower’s income and family size, was created in 2023 after the U.S. Supreme Court blocked President Biden’s sweeping plan to cancel $430 billion in student loan debt for some 43 million Americans.

The regulations implementing the SAVE plan were scheduled to fully go into effect on July 1, but the Biden administration said in January that it would accelerate some of the benefits, soon after forgiving $1.2 billion in student loans for nearly 153,000 borrowers enrolled in the plan.

Legal challenges to the SAVE Plan argued that the Education Department exceeded its authority because the program was implemented without the approval of Congress. They claimed that if the Biden administration could cancel debt by defining the terms of income-driven repayment plans by executive action, this would open the door to much bigger debt forgiveness programs.

An Education Department spokesperson told The Epoch Times in an earlier emailed statement that Congress gave the department the authority to define the terms of income-driven repayment plans in 1993, and the SAVE plan was the fourth time that the agency has used that authority.

In a separate lawsuit challenging the SAVE plan, the U.S. Supreme Court will weigh in on whether the Department of Education can continue implementing the program while the appeals are ongoing.