The Biden administration’s efforts to cancel federal student loan debt for borrowers who enrolled in its new repayment plan took another Republican-led legal hit Thursday.
The fate of the program, known as SAVE (Saving on a Valuable Education), is in flux as courts across the country consider two legal challenges to it.
The courts temporarily halted parts of the repayment plan in late June, including the provision that grants debt forgiveness for borrowers who have made a certain number of payments.
In response, the Department of Education claimed the borrowers enrolled in SAVE were now technically “enrolled in something of a hybrid” plan, according to a court document. The agency believed that borrowers could still receive debt forgiveness under rules governed by a previous repayment plan known as REPAYE.
But on Thursday, the 8th US Circuit Court of Appeals halted that effort in a one-sentence unsigned order. The court said the new freeze would remain in effect until it decides whether to issue a longer-term block on the effort that was sought by several GOP-led states.
The Department of Education did not immediately respond to a request for comment about what the new court order means for borrowers.
In a separate lawsuit, the Supreme Court is expected to decide soon whether the Biden administration is allowed to continue implementing the SAVE plan while the litigation fully plays out.
