A federal appeals court on Friday blocked President Biden’s new student debt relief plan, paving the way for a potential expansion of the legal fight already brewing at the Supreme Court.
The 8the The ruling by the U.S. Circuit Court of Appeals extends the brief pause ordered last month. The court’s updated ruling prevents the administration from moving forward with its Saving on a Valuable Education (SAVE) plan until the court resolves the lawsuit, which could take months.
The 3-0 decision called the plan a “vast assertion of newfound power” and said the Biden administration fell far short of showing clear authorization from Congress.
“The new SAVE plan… is an order of magnitude broader than anything that has come before,” the court wrote in its unsigned document, 10-page opinion.
The panel, all appointed by Republican presidents, also rejected the administration’s attempted workaround after a district judge invalidated parts of the plan at an earlier stage in the case.
Seven Republican state attorneys general sued over the SAVE plan, which was introduced last year after the Supreme Court struck down the presidential universal student debt relief program.
The new income-based repayment plan had two phases. The first phase occurred last fall, increasing income protected payments from 150 percent above federal poverty guidelines to 225 percent and waiving accrued unpaid interest outside of calculated payments.
The second part was expected to occur in July, when loan repayments for undergraduate students would be reduced from 10% of discretionary income to 5% and other loan forgiveness options would become available for certain groups.
The new ruling adds to the state of confusion borrowers find themselves in due to the various decisions regarding the SAVE plan, with potential déjà vu on the way as the Supreme Court is asked to get involved.
In a separate challenge, three Republican state attorneys general filed an emergency request urging the high court to temporarily block the second half of the plan — and agree to take up the challenge on the merits during the court’s next term.
Friday’s decision could prompt the Justice Department to also file an emergency appeal with the Supreme Court, or, similarly, urge the court to hear the case in full now.
The Hill has reached out to the Department of Justice and the Department of Education for comment.
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