The entire Biden student debt forgiveness program was rejected by the US appeals court.

July 19 :
Millions of Americans would have seen their monthly payments reduced under President Joe Biden's new student debt relief proposal, but the scheme was halted on July 18 by a federal appeals court. A group of seven states led by Republicans were successful in getting the remaining portions of the U.S. Department of Education's debt relief proposal shelved by the 8th U.S. Circuit Court of Appeals in St. Louis.

U.S. District Judge John Ross of St. Louis issued an order last month that partially prohibited the department from implementing the administration's Saving on a Valuable Education (SAVE) scheme, which prevented future loan forgiveness but did not completely block the scheme.

With this plan, debtors whose initial principle balances were $12,000 or less can have their debt erased after 10 years and their monthly payments are reduced compared to previous income-based repayment programs.

Attorneys general from many states, spearheaded by Missouri's Andrew Bailey, petitioned the 8th Circuit last week to halt implementation of the remaining portions of the SAVE Plan. The court granted an administrative stay in a brief, one-page order.

After the decision, Bailey celebrated on the social media site X, calling it a "huge win for every American who still believes in paying their own way." The idea for student loans, he claimed, "would have saddled working Americans with half-a-trillion dollars in Ivy League debt."

According to a representative from the Department of Education, the agency is now analyzing the ruling's consequences, will communicate with borrowers who are directly impacted, and "will continue to aggressively defend the SAVE Plan."

Democrat Joe Biden made good on a campaign pledge to forgive up to $20,000 in debt for as many as 43 million Americans when he introduced the SAVE Plan in 2022 as part of a larger $430 billion scheme. The conservative-majority U.S. Supreme Court halted it in June 2023.

The SAVE Plan was supposed to go into full force on July 1st, but some of its provisions have already been put into place. According to the White House, the SAVE Plan could help more than 20 million borrowers. According to the Department of Education, 8 million people have signed up, with 4.5 million having their monthly payments lowered to zero.

On Thursday, the US Department of Education announced that 414,000 borrowers had received $5.5 billion via the SAVE Plan. The plan's real cost, according to Republican state attorneys general, was roughly $475 billion, but the administration predicted a cost of about $156 billion over 10 years.

Last month, a separate federal appeals court, the 10th U.S. Circuit Court of Appeals in Denver, Colorado, placed part of another federal judge's ruling to ban portions of the SAVE Plan on hold. This judge was located in Kansas. A number of states with Republican governors have petitioned the Supreme Court to restore the restraining order.