Supreme Court Issues Another Blow to Biden’s Student Loan Relief Plan

The Supreme Court on Wednesday refused to revive the Biden administration’s multibillion-dollar student debt relief plan. The decision from the court means Joe Biden’s student loan repayment (SAVE) program will remain stalled until the Eighth Circuit rules, leaving millions of borrowers in legal limbo.

The SAVE plan has been attacked and legally challenged by more than a dozen red states since it was announced one year ago. The Justice Department filed an emergency request to lift an appeals court order that blocked the program, but the justices’ unanimous ruling Wednesday leaves a nationwide injunction in place.

In an unsigned order, the court said the temporary pause will remain in place, as it expects the Eighth Circuit Court of Appeals to issue a fuller decision on the plan “with appropriate dispatch.”

Biden’s student loan repayment program lowered monthly undergraduate loan payments for low-income Americans and provided earlier loan forgiveness for borrowers with smaller initial loans.

Roughly 7.5 million people signed up for relief through the SAVE plan. In February, the administration announced they would erase $1.2 billion in student debt for over 150,000 borrowers through the SAVE plan. Over four million individuals have a $0 monthly payment under the plan, which would save the typical typical borrower around $1,000 a year, according to the White House.

The case is expected to return to the Supreme Court’s desk. In a decision in 2023, the Supreme Court ruled 6-to-3 that Biden could not implement a more wide ranging student debt relief plan without congressional approval.

“This is a recipe for chaos across the student loan system,” Mike Pierce, executive director of the Student Borrower Protection Center told the Associated Press.

This story has been updated.