The Supreme Court has decided to temporarily halt the Biden administration’s latest student debt relief plan. The plan aimed to streamline loan cancellation processes and decrease monthly repayments from 10% to 5% of a borrower’s income. Additionally, borrowers earning below 225% of the federal poverty line would not need to make payments, set at $32,800 annually for a single individual.
The administration’s proposal, known as the SAVE plan, is facing legal challenges from Republican-led states. These states argue that the plan could cost as much as $475 billion over a decade. In contrast, the administration points to a Congressional Budget Office estimate of $276 billion.
The Supreme Court refused the administration’s request to reinstate most of the plan, as it had been previously blocked by the 8th U.S. Circuit Court of Appeals. The court expects the appeals court to issue a more detailed ruling on the matter promptly.
Notably, last year, the Supreme Court’s conservative majority rejected a previous debt forgiveness plan that would have eliminated over $400 billion in student loan debt.
Overall, the fate of the student debt relief plan remains uncertain as it navigates through the judicial system.