US appeals court blocks Biden-era student debt relief plan

Reuters

Nate Raymond

February 19, 2025

Feb 18 (Reuters) – A U.S. appeals court ruled on Tuesday that Democratic former President Joe Biden’s administration lacked authority to pursue a student debt relief program designed to lower monthly payments for millions of borrowers and speed up loan forgiveness for some.

The St. Louis-based 8th U.S. Circuit Court of Appeals sided with seven Republican-led states that sued to block the U.S. Education Department’s program, whose future was already in doubt with President Donald Trump back in the White House.

The three-judge panel held that the Education Department exceeded its authority by trying to use a Higher Education Act provision that allows for income-based loan repayment plans to adopt debt forgiveness on the scale provided by Biden’s Saving on a Valuable Education (SAVE) Plan.

That program was designed to provide more generous terms than past income-based repayment plans, with monthly payments dropping for some borrowers to as low as $0.

It also provided debt forgiveness for some smaller loans in as few as 10 years, compared to the 20- or 25-year timeline under earlier rules.

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