A federal appeals court on Tuesday blocked former President Joe Biden’s Saving on a Valuable Education plan, ruling that his administration lacked the authority to implement key provisions of the student loan repayment program.
The Eighth Circuit Court of Appeals ruled in favor of Missouri and six other Republican-led states that sued to halt SAVE, arguing that the Department of Education overstepped its legal authority to enact the expensive plan, which would cost upward of $500 billion over a 10-year period.
A three-judge panel concluded that the administration’s plan, which reduced monthly payments and allowed for early loan forgiveness, went beyond what federal law permits. Judge L. Steven Grasz wrote the opinion, saying the Biden administration went “well beyond this authority by designing a plan where loans are largely forgiven rather than repaid.”
“As the Supreme Court previously held, Missouri suffers a cognizable financial harm when the Secretary enacts a plan that discharges student loans and closes accounts serviced by MOHELA,” Grasz wrote, referencing the high court’s blow to Biden’s previous, more ambitious gambit to forgive millions of student borrowers’ debts, and referring to the Missouri Higher Education Loan Authority, a non-profit organization that manages student loans for the state’s Education Department.
The ruling not only upheld a lower court’s injunction against SAVE’s early loan forgiveness provisions but also expanded it, blocking the administration from proceeding with any debt cancellation, suspending interest accrual, or lowering payment thresholds. The court further prevented the Department of Education from reviving older repayment plans to maintain loan forgiveness through other means.
BREAKING: At long last, we just obtained a final opinion from the Eighth Circuit forever blocking the kind of $500 billion student loan bailout Biden tried to do last year. This opinion puts an end to that lawless attempt and any similar future attempt. https://t.co/w5apU1gWzk
— Josh Divine (@JoshDivineMO) February 18, 2025
Missouri Attorney General Andrew Bailey, who helped lead the lawsuit, called the ruling a “HUGE win” and said it sets a precedent to prevent future administrations from forcing taxpayers to cover student debt. State Solicitor General Joshua Divine said the opinion “puts an end” to Biden’s efforts to implement broad student loan relief through executive action.
Six other states joined Missouri, including Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma.
The appeals court relied heavily on the Supreme Court’s 2023 decision that blocked a plan to cancel up to $400 billion in student loans, citing Justice Neil Gorsuch’s concurrence in a footnote: “It is unclear why Congress would establish a repayment plan where the overall repaid amount of the balance of the loan turns substantially on the whims of the then-secretary, leaving borrowers in a state of uncertainty.”
The SAVE plan is an income-driven repayment program that lowers monthly payments based on a borrower’s income and family size. It also shortens the time to loan forgiveness for some borrowers, eliminates unpaid interest accrual, and offers early forgiveness for those with smaller balances.
The previous plan, blocked by the high court, aimed to forgive up to $20,000 per borrower and was a one-time cancellation program for Pell Grant recipients and certain low-income borrowers.
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The Eighth Circuit’s decision came as President Donald Trump proposed sweeping plans for the Education Department, including a serious proposal to shut down the federal agency in an effort to prioritize states’ authority over education.
In November, Politico reported that then-Trump transition advisers were exploring methods to eliminate the SAVE plan while also considering alternative repayment options for borrowers, according to individuals familiar with the discussions.