A federal appeals court on Thursday blocked President Biden’s administration from continuing to implement a revamped student debt bailout — more than a year after the Supreme Court struck down his $430 billion forgiveness push.
The St. Louis-based 8th US Circuit Court of Appeals granted a request by seven Republican-led states to put on hold parts of Biden’s $475 billion student debt cancellation plan, following an earlier ruling by federal judges in Kansas and Missouri.
The preliminary injunctions last month by US District Judge John Ross in St. Louis and Daniel Crabtree in Kansas City had blocked the Education Department from granting further loan forgiveness under the administration’s Saving on a Valuable Education (SAVE) Plan — but not the $5.5 billion already cancelled under Biden.
A group of state attorneys general led by Missouri AG Andrew Bailey motioned for the 8th Circuit to block it last week.
Bailey in an X post said the ruling was a “huge win for every American who still believes in paying their own way” and that the plan “would have saddled working Americans with half-a-trillion dollars in Ivy League debt.”
The Denver-based 10th US Circuit Court of Appeals put part of Crabtree’s decision on hold, with the Republican-led states later asking the Supreme Court to step in and reinstate that injunction.
“Our Administration will continue to aggressively defend the SAVE Plan — which has been helping over 8 million borrowers access lower monthly payments, including 4.5 million borrowers who have had a zero dollar payment each month,” an Education Department spokesperson replied in a statement.
“And, we won’t stop fighting against Republican elected officials’ efforts to raise costs on millions of their own constituents’ student loan payments,” the spokesperson added.
None of the billions of dollars in forgiven funds have been ordered to be paid back by the recent rulings.
The plan was scheduled to take full effect on July 1.
Other Republicans also hailed the ruling, with Senate Health, Education, Labor and Pensions Committee ranking member Bill Cassidy (R-La.) calling it “another rebuke to President Biden’s illegal student loan schemes.”
“He isn’t ‘forgiving’ debt. He is taking the debt from those who willingly took it out to go to college and transferring it onto taxpayers who decided not to go to college or already paid off their loans,” said Cassidy, one of Biden’s sternest critics on the issue.
“This is an abuse of power before an election in an attempt to buy votes at the expense of American taxpayers,” he added.
Biden’s SAVE plan has been estimated to cost US taxpayers as much as $475 billion over the next 10 years.
The income-based repayment plan cuts monthly student loan payments in half and eliminates monthly payments for minimum-wage earners
It also forgives outstanding debt for student borrowers who owe $12,000 or less after making payments for 10 years.
The Supreme Court struck down Biden’s first attempt at the SAVE plan in June 2023, with a majority of the high court’s conservative justice ruling that the president had unconstitutionally cancelled up to $20,000 in debt for up to 43 million Americans.