The Biden Administration’s SAVE student loan forgiveness program was struck with another massive legal blow on Friday when the Eighth Circuit Court of Appeals ruled to block its implementation.
The three-Republican-appointee panel deemed the effort to allow borrowers enrolled in the Saving on a Valuable Education, or SAVE, program to restructure their loan payments as unconstitutionally authorized.
In the ruling, justices argued that the SAVE plan “is an order of magnitude broader than anything that has come before,” and that the administration had falsely “discover[ed] in a long-extant statute an unheralded power to regulate a significant portion of the American economy.”
The court held that the Department of Education must stop pausing or relieving both principle and interest balances from the roughly 8 million borrowers utilizing the program, having previously issued a stay temporarily blocking the program.
The SAVE program, enacted after the Supreme Court struck down a more ambitious plan, was tailored to avoid the legal challenges that killed previous student debt relief attempts. But in the 10-page order, jurists suggest the Biden administration had made a “vast assertion of newfound power” in instituting relief, giving a win to the seven plaintiff Republican state attorneys general.
The injunction order likely sends the program to the Supreme Court, creating confusion for borrowers, who are already forced to navigate a series of assaults on the relief package. The SAVE plan came as part of a broad set of loan forgiveness plans, repayment tweaks, and other debt relief measures.