Biden student loan plan bailed out — for now

A portion of President Joe Biden’s student loan forgiveness plan can go forward after an appeals court ruling, which will allow millions of borrowers to make lower debt payments.

The Saving on a Valuable Education, or SAVE, Plan is aimed at making debt repayment more affordable for low- and middle-income borrowers. Federal judges in Kansas and Missouri stalled parts of its implementation on June 24. 

The U.S. Court of Appeals for the 10th Circuit ordered the SAVE Plan’s lower payments on undergraduate student loans for about 3 million people to proceed, granting an emergency stay of the Kansas court’s injunction in a June 30 decision.

A Missouri court injunction, which halted debt-cancellation efforts, wasn’t affected.

Parts of the SAVE plan aren’t affected by the lawsuits, like its relief for those whose debt balances are rising due to unpaid interest. 

The injunctions could risk the result of the plan being struck down by the courts, like how the Supreme Court struck down Biden’s first plan.

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Biden’s plan to cancel billions of dollars in student debt was a cornerstone of his 2020 presidential campaign. His initial attempt to wipe out up to $20,000 for millions of borrowers was swatted down by the Supreme Court.

The president faces outcry from within his party on whether he should stay in the 2024 presidential race after his poor debate performance last week.