The U.S. 8th Circuit Court of Appeals recently made a significant decision regarding former President Joe Biden's student loan forgiveness plan. The court ruled against the plan, known as the SAVE plan, which aimed to eliminate nearly $500 billion in student loan debt. The court found that Biden's secretary of education had overstepped their authority by creating a plan that primarily forgave loans rather than requiring repayment.
Missouri Attorney General Andrew Bailey, who initially filed a lawsuit against the Biden administration over the SAVE plan, emphasized that the ruling sets a crucial precedent for preventing future presidents from implementing similar debt forgiveness initiatives. While the ruling does not have an immediate impact beyond blocking future attempts at Biden's plan, it serves as a safeguard against burdening working Americans with the financial responsibility of others' Ivy League debts.
Previously, the Supreme Court of the United States had denied 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 entire SAVE program while legal proceedings continued in lower courts. The Department of Justice, representing the Biden administration, had sought emergency relief from the high court, arguing against the nationwide injunction that temporarily froze the SAVE plan.
The Biden administration defended the SAVE plan, highlighting its benefits for over 8 million borrowers, including providing lower monthly payments and potential forgiveness for those with balances of $12,000 or less after a decade of payments. Despite facing opposition from Republican officials, the administration remained committed to supporting borrowers and reducing student loan costs.
President Biden had introduced the SAVE plan following the Supreme Court's rejection of his initial student loan forgiveness proposal. The White House projected that the plan could significantly reduce borrowers' monthly payments, cut costs in half, and potentially save individuals at least $1,000 annually. Additionally, borrowers with lower original balances could benefit from complete forgiveness after meeting specific payment criteria.
