The U.S. 8th Circuit Court of Appeals delivered a final blow to former President Joe Biden's student loan forgiveness plan on Tuesday. The court ruled against the Biden administration's $500 million initiative, known as the SAVE plan, which aimed to eliminate student loan debt.
Missouri Attorney General Andrew Bailey initiated the legal challenge against the Biden administration, arguing that the Secretary of Education had overstepped their authority by proposing a plan that primarily forgave loans instead of requiring repayment.
The court's decision effectively prevents future presidents from implementing a similar loan forgiveness strategy, as highlighted by Bailey in a statement following the ruling.
Previously, the Supreme Court of the United States had rejected the Biden administration's request to lift a block on the SAVE plan. A federal appeals court in Missouri had also halted the enforcement of the program while legal proceedings unfolded in lower courts.
The Biden administration contended that the nationwide injunction imposed by the court was excessive, freezing the implementation of the SAVE plan temporarily. Despite facing legal setbacks, the administration remained committed to defending the initiative, emphasizing its benefits for millions of borrowers.
The SAVE plan was introduced by Biden as an alternative after his initial student loan forgiveness proposal was struck down by the Supreme Court. The White House touted the plan's ability to reduce borrowers' monthly payments to zero, cut monthly expenses in half, and potentially save borrowers at least $1,000 annually. Additionally, borrowers with an original balance of $12,000 or less stood to receive forgiveness for any remaining debt after making payments for a decade.
