Appeals Court Blocks the Rest of Biden’s Student Loan Forgiveness Plan, Creating Uncertainty for Borrowers

President Joe Biden’s Saving on a Valuable Education plan was temporarily blocked by a federal appeals court on Thursday, leaving millions of enrolled borrowers unclear on what’s next for their student loan payments.

This ruling is the latest in a string of dizzying rulings opposing the Biden administration’s latest attempt at widespread student debt relief. In June, two federal judges filed injunctions against critical parts of the SAVE plan in response to Republican-led lawsuits filed in Kansas and Missouri. These rulings temporarily prevented the Department of Education from lowering payments for SAVE borrowers and blocked new forgiveness efforts under the income-driven repayment program.

On June 30, the 10th US Circuit Court of Appeals ruled to allow the Department of Education to proceed with lowering borrowers’ payments to 5% of their discretionary income. However, the latest ruling by the 8th US Circuit Court of Appeals temporarily halted all elements of the administration’s SAVE plan that were not already blocked.

Payments for borrowers in the SAVE plan are currently paused while the administration works to recalculate its monthly student loan payments. Following the latest ruling, it’s uncertain what’s next for borrowers enrolled in SAVE. It’s possible student loan payments may remain on pause — in temporary forbearance — until the matter is resolved by the courts.