Appeals court blocks Biden student loan repayment plan

A federal appeals court blocked President Biden’s student loan repayment plan, which would have lowered payments for millions of people who borrowed money for education.

The 8th Circuit Court of Appeals ruled Thursday, granting a motion for an administrative stay filed by Republican-led states. The order will prohibit the Biden administration from implementing parts of its Saving on a Valuable Education (SAVE) program that weren’t already blocked by lower courts, The Associated Press reported.

Earlier Thursday, the administration announced it would forgive another $1.2 billion in student loans for 35,000 people. The people who would have loans forgiven are teachers, nurses, law enforcement officers and first responders under the Public Service Loan Forgiveness program.

The announcement brings the total number of people who have received relief to 4.76 million.

The SAVE plan has faced two separate legal challenges.

In June, two injunctions handed down by federal judges put parts of the plan on pause. A Kansas judge said the Education Department can’t enact the full scope of the plan because it did not receive authority from Congress to do so. A judge in Missouri ruled the department can’t forgive loans because it illegally deprives state loan operators of revenue.

Arkansas Attorney General Tim Griffin posted online celebrating the appeals court decision in his lawsuit against Biden.

“This is the latest blow to President Biden’s unlawful plans to cancel student loans without congressional approval. The president is disregarding the separation of powers in the constitution and the fundamentals so clearly articulated in schoolhouse rock,” Griffin said.

The ruling blocks all aspects of the SAVE plan.

The Department of Education said in a statement to The Hill that it is assessing the impacts of the ruling and will be in touch with borrowers if it impacts them.

“Our Administration will continue to aggressively defend the SAVE Plan – which has been helping over 8 million borrowers access lower monthly payments, including 4.5 million borrowers who have had a zero dollar payment each month,” a department spokesperson said in a statement. “And, we won’t stop fighting against Republican elected officials’ efforts to raise costs on millions of their own constituents’ student loan payments.”

In a statement Thursday evening, Education Secretary Michael Cardona said the decision could have “devastating consequences” for millions if it remains in effect.

“It’s shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers,” he said.  

Story was updated at 10:48 p.m. EDT