Appeals Court Blocks Biden’s Student Loan Repayment Plan, Causing Uncertainty

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A federal appeals court temporarily blocked the Biden administration’s new student loan repayment plan, in a move that could unleash chaos for the eight million borrowers enrolled in the program. The U.S. Court of Appeals for the Eight Circuit, based in St. Louis, granted a request by a group of Republican-led states for an administrative stay, which prevents the Biden administration from “implementing or acting pursuant to the final rule,” according to the court filing, which refers to the rule that created the SAVE program. This ruling is just the latest in a series that have sprung from separate lawsuits brought by two groups of Republican-led states challenging the legality of the SAVE repayment plan, which ties monthly payments to a borrower’s income and household size. The program, which opened in August last year, is more generous than previous iterations of income-driven repayment plans and has generated zero-dollar payments for 4.5 million low-income borrowers. “We are assessing the impacts of this ruling and will be in touch directly with borrowers with any impacts that affect them,” a spokesperson for the Education Department said.