Biden's student loan forgiveness plan blocked in federal court same day White House launches new debt cancellation attempt

A federal appeals court has blocked the remaining portion of President Joe Biden's student loan cancellation plan under the Saving on a Valuable Education (SAVE) program, which would have lowered payments for borrowers. The ruling came down on Thursday at the 8th Circuit Court of Appeals. The ruling comes the same day the Biden administration announced a new student debt cancellation plan.

The court granted a motion from seven Republican states to block portions that had not previously been blocked by the courts, per Fox Business. Last month, a St. Louis court blocked the agency from granting additional student loan cancellations under the Biden administration's SAVE program, however, elements of the plan were still in effect.  

State attorneys who were headed by Attorney General Andrew Bailey (MO) had asked to block the portions that were still in effect. Bailey wrote, "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," he added. The program would have used taxpayer funds to lower the costs of the monthly payments for those with student loans.  

The decision comes as the Biden administration announced another round of student debt cancellation, totaling around $1.2 billion for those eligible for the Public Service Loan Forgiveness program (PSLF). The PSLF program cancels debt for teachers, nurses, firefighters and other government-funded positions.

“Today’s ruling from the 8th Circuit blocking President Biden’s SAVE plan could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect,” Education Secretary Miguel Cardona said in a statement, per the Associated Press. “It’s shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers.”

Borrowers enrolled in the SAVE program will be put in an interest-free forbearance as the case is fleshed out further in the legal system.

“Our Administration will continue to aggressively defend the SAVE Plan — which has been helping over 8 million borrowers access lower monthly payments, including 4.5 million borrowers who have had a zero dollar payment each month,” the Biden administration’s Education Department said in a statement.