SAVE Plan Block is Upheld By Appeals Court

Published February 18, 2025

02:21 PM EST

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KEY TAKEAWAYS

  • A U.S. appeals court blocked former President Joe Biden’s Saving for a Valuable Education (SAVE) on Tuesday as the lawsuit was sent back to a lower court.
  • The appeals court agreed with the states that argued Biden did not have the authority to establish the generous repayment plan and said the Department of Education could not provide broad student loan forgiveness through repayment plans.
  • This ruling upheld a temporary block on the program, and the case’s merits will now be argued in a lower court.
  • It’s up to President Donald Trump and the Department of Education to defend the plan to prevent its dissolution. However, the president has been critical of Biden’s repayment and forgiveness plans.

A U.S. appeals court blocked the Saving for a Valuable Education (SAVE) plan Tuesday.

The 8th U.S. Circuit Court of Appeals agreed with the states that argued former Presiden Joe Biden did not have the authority to design a repayment plan “where loans are largely forgiven rather than repaid.”

The appeals court upheld a preliminary injunction on the repayment plan, suspending its implementation until the lawsuit is settled. The case will now be sent back to a lower court for the two parties to argue whether the plan itself is legal.

However, President Donald Trump and the Department of Education may choose not to defend the plan in court. Trump’s previous rhetoric toward Biden’s repayment and forgiveness plans has been largely negative, and his administration has been working to largely dismantle the Department of Education.

How Did We Get Here?

Borrowers enrolled in the SAVE plan have been in forbearance since July. Two lawsuits temporarily blocked the repayment plan, which was supposed to provide cheaper payments and an easier path to forgiveness for federal student loan borrowers.

The cases have gone back and forth in federal courts, leaving many borrowers in limbo and forcing the Department of Education to reopen older repayment plans.

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