A U.S. appeals court ruled that the Biden administration lacked the authority to implement its student debt relief program. The 8th U.S. Circuit Court of Appeals sided with seven Republican-led states, stating that the Education Department exceeded its power under the Higher Education Act.
The program, part of Biden’s Saving on a Valuable Education (SAVE) Plan, aimed to lower monthly payments—some as low as $0—and offer faster loan forgiveness. However, the court ruled that Congress only authorized repayment plans, not large-scale debt cancellation.
Judge L. Steven Grasz, a Trump appointee, wrote that Biden’s plan focused on forgiveness rather than repayment, exceeding legal limits. Missouri Attorney General Andrew Bailey praised the ruling, arguing taxpayers shouldn’t fund others’ student debt. Education Department official James Bergeron said the administration misled borrowers about loan cancellation.
This ruling follows the Supreme Court’s 2023 decision blocking Biden’s $430 billion student loan forgiveness plan, which was set to help 43 million Americans. Despite legal setbacks, Biden’s administration still managed to forgive $183.6 billion in student loans for over 5 million borrowers.
With Trump back in office, the future of student debt relief remains uncertain.
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