A federal appeals court has blocked the Biden administration’s student debt relief plan, which aimed to reduce monthly payments for millions of borrowers.
On Thursday, the 8th Circuit Court of Appeals granted an administrative stay requested by a group of Republican-led states seeking to invalidate the entire student loan forgiveness program. This court order prevents the administration from implementing parts of the SAVE plan not already blocked by lower courts.
The ruling coincided with the Biden administration’s announcement of a new round of student loan forgiveness, totaling $1.2 billion for approximately 35,000 borrowers eligible for the Public Service Loan Forgiveness (PSLF) program.
The PSLF program, established in 2007, offers relief to public servants such as teachers, nurses, and firefighters who make 120 qualifying monthly payments. However, borrowers have faced strict rules and servicer errors that hindered debt cancellation. The Biden administration has since revised some program rules and retroactively credited many borrowers for their payments.
Education Secretary Miguel Cardona stated that borrowers enrolled in the SAVE plan, affected by Thursday’s ruling, will be placed into interest-free forbearance as the case proceeds through the legal system.
