US appeals court blocks Biden’s student debt relief program

​​​​​​​By Yasin Gungor

ISTANBUL (AA) - A US appeals court on Tuesday blocked the former Joe Biden administration’s student debt relief program to lower monthly payments and accelerate loan forgiveness.

The St. Louis-based 8th US Circuit Court of Appeals ruled that the Education Department exceeded its statutory authority, siding with Republican-led states that argued the plan could cost billions of dollars without congressional approval.

The Saving on a Valuable Education (SAVE) plan, which sought to reduce monthly payments for some borrowers to as low as $0 and forgive loans after as little as 10 years, was challenged by seven states. They claimed the secretary of education lacked the authority to forgive loans through an income-driven repayment plan.

The court’s decision cited four factors in granting the preliminary injunction: the threat of irreparable harm, the balance of harms, the likelihood of success on the merits and the public interest. The court said no factor is determinative but “the probability of success factor is the most significant.”

It follows the Supreme Court’s 2023 decision to block Biden’s $430 billion student loan forgiveness plan.

The appeals court has now instructed the district court to modify the injunction to halt the entire SAVE Plan.