(FreePressBeacon.com) – Continuing to lose even after it is gone, the Biden administration’s controversial student loan relief plan, known as SAVE, has been halted by a U.S. appeals court, responding to lawsuits from several Republican-led states.
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These states argue that such massive debt forgiveness exceeds the president’s authority and poses fiscal risks to state economies.
This court ruling throws a wrench into Biden’s ambitious agenda to address student debt.
In a significant legal setback, the 8th U.S. Circuit Court of Appeals sided with seven Republican-led states, including Missouri, that filed a lawsuit challenging the validity of President Joe Biden’s student loan relief through the Saving on a Valuable Education (SAVE) plan.
This decision underscores conservative concerns about government overreach and executive power limits.
The states assert that Biden’s plan, which aimed to forgive up to $500 billion in student debt over a decade, unlawfully extends the scope of the Education Department’s authority under the Higher Education Act.
The court agreed, stating that the department exceeded its lawful powers.
Biden’s plan sought to provide meaningful relief to borrowers by including provisions for lower monthly payments and quicker debt erasure for smaller balances.
Under these new terms, some borrowers could have seen their monthly payments drop to zero.
However, the fiscal burden of such a program would be immense, with potential costs reaching $475 billion according to estimates.
“A U.S. appeals court on Tuesday blocked the Biden administration’s student loan relief plan known as SAVE, a move that will likely lead to higher monthly payments for millions of borrowers,” CNBC reports.
Opponents, including Missouri Attorney General Andrew Bailey, emphasized the need to prevent presidents from imposing substantial financial burdens on working Americans.
This was not Biden’s first attempt at student debt relief; his administration announced $183.6 billion in loan forgiveness for millions of borrowers before departure from office.
The GOP has proposed alternative plans, suggesting that additional taxpayer revenue could support President Trump’s tax cuts.
The Institute for College Access & Success warned that such plans could increase the average borrower’s monthly payment by nearly $200, further straining household budgets.
“The average student loan borrower could pay nearly $200 a month more if the GOP’s plans to reshape student loan repayments succeed, according to an early estimate by The Institute for College Access & Success,” CNBC writes.
This judicial decision marks a significant blow to Biden’s strategy for revamping the student debt system.
With the Supreme Court previously blocking a similar $430 billion debt cancellation effort, it remains to be seen what the implications will be for millions of Americans burdened by student loans.
A U.S. appeals court on Tuesday blocked the Biden administration’s student loan relief plan known as SAVE, a move that will likely lead to higher monthly payments for millions of borrowers. https://t.co/d5fqNe6nLC pic.twitter.com/mrsWzCEoVq
— CNBC (@CNBC) February 19, 2025
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