Biden's $500 million student loan giveaway collapses under court's ruling

The United States Eighth Circuit Court of Appeals ruled on Tuesday to put an end to the Biden administration's student loan giveaway plan that was estimated to cost taxpayers up to $500 million.

The lawsuit was originally filed by Missouri Attorney General Andrew Bailey (R), and several other states — Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma — joined the legal action.

'This precedent is imperative.'

After the Supreme Court struck down a sweeping plan to wipe out federal student loan debt, former President Joe Biden refused to take no for an answer. Instead, he responded to the ruling by rolling out many smaller but similar plans that promised to bring relief to borrowers by passing along the cost to taxpayers.

Last year, Biden's White House announced that it planned to launch another round of loan "forgiveness" initiatives through its payment programs, including Saving on a Valuable Education, an income-driven repayment plan.

"Already 8 million borrowers are enrolled in SAVE, 4.5 million of those borrowers have a monthly payment of $0, and over 1 million additional borrowers have a monthly payment of less than $100," the administration stated at the time.

Critics accused Biden of ignoring and even attempting to circumvent the Supreme Court's ruling.

The seven states, led by Bailey, sued the administration, arguing that canceling federal student loan debt would exceed the "statutory authority given to the Secretary of Education."

On Tuesday, the circuit court sided with the states, agreeing to block the Biden administration's plan to cancel debt.

The court ruling read, "We conclude the states are likely to succeed in their claim that the Secretary's authority to promulgate ICR [Income-Contingent Repayment] plans does not authorize loan forgiveness at the end of the payment period."

"The Secretary has gone well beyond this authority by designing a plan where loans are largely forgiven rather than repaid," it added.

Bailey responded to the court's decision, stating, "Though Joe Biden is out of office, this precedent is imperative to ensuring a President cannot force working Americans to foot the bill for someone else's Ivy League debt."

The case will be returned to a lower court, which will determine whether the SAVE repayment plan is lawful.

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