On February 18, a federal appeals court ruled against former President Joe Biden’s SAVE student loan repayment plan, blocking key provisions intended to provide financial relief for millions of loan borrowers. The decision halts the former administration’s efforts to ease student loan debt. This appeal has sparked confusion and concern for those who expected reduced payments under the program.
The Biden administration introduced the SAVE (Saving on a Valuable Education) plan in response to the Supreme Court’s 2023 decision to strike down his original student loan forgiveness program. The SAVE plan aimed to adjust income-driven repayment (IDR) plans, lowering monthly payments based on a borrower’s income and forgiving balances for those who made consistent payments over time.
According to the official White House statement, the administration planned to cut payments in half for many borrowers, eliminate interest accumulation, and offer faster forgiveness for low-income individuals. When announcing its rollout in August 2023, the administration called it “the most affordable student loan repayment plan in history.”
The Federal Appeals Court ruled in response to lawsuits from Republican-led states and conservative legal groups, arguing that the former administration executed the program without congressional approval.
The court found that the executive branch can not solely change repayment terms in ways that won’t impose financial hurdles on taxpayers without complete authorization from Congress. This same reasoning resembles previous legal arguments against Biden’s earlier attempt at broad student loan cancellation.
With the court’s ruling, millions of borrowers enrolled in the SAVE plan may now lose access to its benefits. According to CNBC, those currently enrolled in the program will be removed from the plan. Such would force them back onto repayment schedules that could significantly increase their monthly payments.
Many students and graduates who expected lower payments or eventual forgiveness under the plan now face financial uncertainty.
The Department of Education has not announced a clear transition plan for those affected, leaving borrowers waiting for guidance on repayment options.
Former Education Secretary Miguel Cardona stated that the decision could have “devastating consequences for millions of student loan borrowers” and criticized the “politically motivated lawsuits waged by Republican elected officials” that led to this outcome.
Republican lawmakers have praised the court’s decision. Representative Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, described the SAVE repayment plan as illegal and called it “the costliest regulation in the history of the U.S.”
This ruling has intensified the ongoing debate over the federal government’s role in student loan forgiveness, highlighting the deep partisan divide.
Former President Biden and his legal team are expected to challenge the ruling, but the future of student loan forgiveness remains uncertain. Congress is unlikely to pass new legislation, limiting the administration’s legal options.
This ruling means a return to previous repayment plans and increased financial pressure for students at Monmouth University and borrowers nationwide unless further action is taken. The coming weeks will determine whether the administration can salvage any parts of the SAVE plan or if borrowers must prepare for higher payments moving forward.
