The Biden administration's income-driven student debt relief plan, which would have lowered monthly payments for millions of borrowers, was blocked by a federal appeals court on Thursday.
The ruling comes the same day that President Joe Biden and the U.S. Department of Education announced they would cancel another $1.2 billion for borrowers in the Public Service Loan Forgiveness program. That program, which was signed into law by former President George W. Bush in 2007, offers relief for public servants including teachers, nurses, law enforcement and first responders. Since loosening the program's strict eligibility rules, the administration has forgiven $69.2 billion in outstanding loan balances belonging to 946,000 borrowers.
In its Thursday ruling, the 8th Circuit Court of Appeals granted an emergency motion brought forward by several Republican-led states to temporarily block parts of the Saving on a Valuable Education plan that have not already been blocked by a lower court judge.
"Borrowers enrolled in the SAVE Plan will be placed in an interest-free forbearance while our Administration continues to vigorously defend the SAVE Plan in court," Education Secretary Miguel Cardona said in a written statement. "The Department will be providing regular updates to borrowers affected by these rulings in the coming days."
Cardona added that the ruling could have "devastating consequences" for millions of student borrowers and that the department will continue to defend the SAVE plan.
