Published July 20. 2024 08:53AM
WASHINGTON (AP) — A federal appeals court blocked the implementation of the Biden administration’s student debt relief plan, which would have lowered monthly payments for millions of borrowers.
In a ruling Thursday, the 8th Circuit Court of Appeals granted a motion for an administrative stay filed by a group of Republican-led states seeking to invalidate the administration’s entire student loan forgiveness program. The court’s order prohibits the administration from implementing the parts of the SAVE plan that were not already blocked by lower court rulings.
The ruling came the same day that the Biden administration announced another round of student loan forgiveness, this time totaling $1.2 billion for roughly 35,000 borrowers eligible for the Public Service Loan Forgiveness program.
The PSLF program, which provides relief for teachers, nurses, firefighters and public servants who make 120 qualifying monthly payments, was originally passed in 2007. But borrowers ran into strict rules and servicer errors that prevented them from having their debt canceled. The Biden administration adjusted some of the rules and retroactively gave many borrowers credits towards their payments.
Borrowers who are enrolled in the SAVE plan, which was the subject of Thursday’s ruling, will be placed into interest-free forbearance while the case works its way through the legal system.