The U.S. Court of Appeals for the Eighth Circuit has ruled against former President Joe Biden’s federal student loan forgiveness program, SAVE (Saving on a Valuable Education), effectively nullifying the initiative.
On February 18, the Eighth Circuit Court of Appeals in St. Louis, Missouri, sided with seven Republican-led states that had challenged the program, issuing a decision to block its implementation.
The SAVE Plan was a revised income-driven student loan repayment program introduced by the Biden administration after the Supreme Court struck down an earlier student debt forgiveness plan in 2023.
Under SAVE, borrowers with a loan balance of $12,000 or less who had made payments for at least 10 years (reduced from the previous 20 to 25 years) would have had their remaining debt automatically forgiven.
Additionally, the program sought to cut borrowers’ required monthly loan payments from 10% to 5% of their discretionary income.
However, seven Republican-led states challenged the program in court, arguing that the Department of Education had exceeded its legal authority in implementing SAVE.
In his ruling, Judge Steven Grasz stated that the SAVE Plan “far exceeds the authority of the Secretary of Education” by forgiving large portions of student loan debt without congressional approval.
Missouri Attorney General Andrew Bailey, who was among those who filed the lawsuit, celebrated the ruling, stating on X (formerly Twitter): “Even though President Biden has left office, this decision sets a crucial precedent: no president can force hard-working Americans to pay off someone else’s college debt. This is a massive victory.”
BY JIHYE YOON [yoon.jihye@koreadailyny.com]
