Federal appeals court issues another blow to Biden’s student loan repayment plan
The fate of the plan, known as SAVE (Saving on a Valuable Education), is in flux as courts across the country consider two legal challenges brought by several Republican-led states.
The Department of Education already put the SAVE plan on hold last month due to the ongoing litigation, so Friday’s ruling has no immediate effect on the 8 million borrowers currently enrolled in the repayment plan.
Those borrowers have been placed in an interest-free forbearance during which they are not required to make monthly student loan payments.
The 8th Circuit Court of Appeals had previously issued a short-term term pause of SAVE while it decided whether to issue the more lasting block of the program that came on Friday.
In a unanimous, unsigned ruling issued by three Republican-appointed judges, the court said that the Department of Education could not move forward with any further implementation of the SAVE plan while the court considered the larger legal challenge to it.
The Biden administration could ask the Supreme Court to step in and lift Friday’s order. The high court is already considering a separate request from the administration stemming from another challenge to the plan.
The appeals court judges said in their ruling that the states that brought the challenge “have demonstrated at least a ‘fair chance’ that they will ultimately prevail.”
“On initial review, the States have the better of the arguments on these ‘substantial questions of law which remain to be resolved,’” the court said in the 10-page ruling.
Friday’s panel was comprised of Circuit Judge Raymond Gruender, an appointee of former President George W. Bush, and Circuit Judges Ralph Robert Erickson and Leonard Steven Grasz, both of whom were appointed by former President Donald Trump.
SAVE is one of the Biden-Harris administration’s key student loan policies. It’s meant to lower enrolled borrowers’ monthly payments and provide a faster path to student debt cancellation.
SAVE was launched soon after the Supreme Court knocked down Biden’s signature, one-time student loan forgiveness program last summer.
The ongoing legal challenges to SAVE have raised concerns in the realm of politics, as several Republican-led states are challenging the Biden-Harris administration's student loan policy.The ruling by the 8th Circuit Court of Appeals marks a setback for the Biden administration in their efforts to implement SAVE, as the judges noted a 'fair chance' the states may ultimately prevail.
