On July 18, 2024, a federal appeals court in the United States prohibited the implementation of President Joe Biden's student debt relief plan. The Saving on a Valuable Education (SAVE) plan, which was designed to decrease monthly payments for student loan debtors, was suspended by the Court of Appeals for the Eighth Circuit. Education Secretary Miguel Cardona expressed concern over the ruling, warning of potentially devastating consequences for millions of borrowers facing unaffordable payments. Previously, federal judges in Kansas and Missouri had temporarily halted parts of the SAVE plan, citing overreach by the Education Department.
The SAVE plan was designed to provide targeted relief for over 3.4 million student loan borrowers, approving more than $116 billion in aid, including $39 billion for borrowers with historical payment count inaccuracies, $45.7 billion for public servants, and $10.5 billion for those with total and permanent disabilities. The program aimed to reduce monthly payments to 5% of discretionary income and limit the repayment window to 10 years for loans with original balances of $12,000 or less. Federal student loan repayments, which have been on hold since March 2020, are set to restart on September 1, affecting approximately 43 million borrowers who collectively owe more than $1.6 trillion.
