A U.S. appeals court has thrown a wrench into the Biden administration’s efforts to ease student debt loans, ruling that the government overstepped its authority with the SAVE Plan.
The decision is a win for Republican-led states and a setback for millions of borrowers hoping for faster debt forgiveness.
What Happened?
The St. Louis-based 8th U.S. Circuit Court of Appeals ruled that the Department of Education couldn’t use the Higher Education Act to offer widespread debt forgiveness. The SAVE Plan aimed to lower monthly payments to as little as $0 for some borrowers and speed up loan forgiveness from 20-25 years to as few as 10 years.
Why the Court Said No
Judge L. Steven Grasz, appointed by Trump, wrote that the law allows repayment plans that lead to borrowers actually repaying their loans—not having them forgiven. With support from two other Republican-appointed judges, the panel said Biden’s plan crossed the line by focusing more on wiping out debt than collecting payments.
Who Filed the Lawsuit?
Seven Republican-led states, including Missouri, led the charge against the plan. Missouri Attorney General Andrew Bailey said the ruling protects taxpayers from having to cover others’ college debt. Meanwhile, James Bergeron, now acting undersecretary at the Education Department under Trump, accused Biden’s administration of misleading borrowers into thinking their loans would just vanish.
What This Means for Borrowers
This ruling is a blow to those who hoped to see their debt disappear faster. The SAVE Plan would’ve forgiven smaller loans in just 10 years and slashed monthly payments, giving millions of borrowers some breathing room. Now, those benefits are off the table—at least for now.
Biden’s Student Debt Battle: Strike Two
This isn’t Biden’s first loss in the student debt arena. In 2023, the Supreme Court blocked his earlier plan to cancel $430 billion in student loans. After that, the administration tried smaller-scale solutions, forgiving $183.6 billion in loans for over five million borrowers before Biden left office. But the SAVE Plan was supposed to be a long-term fix, and its future now hangs in the balance.
What Happens Next?
With Trump back in the White House, the chances of reviving Biden’s debt relief efforts are slim. The current administration has made it clear they oppose large-scale debt forgiveness. So unless Congress steps in with new legislation, borrowers are likely stuck with the old rules—meaning longer repayment periods and fewer opportunities for forgiveness.
The Bottom Line
The court’s decision is a major setback for anyone counting on faster debt relief. While some existing repayment options are still available, the SAVE Plan’s benefits are off the table for now. With Republicans in control and Biden out of office, the future of student debt relief looks uncertain at best.
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