On Wednesday (Aug. 28), the Supreme Court declined to reinstate the Biden administration's SAVE plan, an initiative designed to cancel student debt for millions of borrowers. "The application to vacate injunction presented... to the Court is denied," the decision read. "The Court expects that the Court of Appeals will render its decision with appropriate dispatch."

The SAVE plan (which stands for Saving on a Valuable Education), is an income-driven repayment program that was intended to reduce the burden on borrowers by lowering monthly payments and providing earlier loan forgiveness for those with smaller balances. However, the plan has faced significant legal challenges, primarily from GOP-led states, all of which resulted in a nationwide block by the U.S. Court of Appeals for the Eighth Circuit in 2023.

"The secretary of education established the first comprehensive student loan forgiveness program, invoking the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) for authority to do so," stated Chief Justice John Roberts in his opinion for the Supreme Court's Republican majority at that time. "Six states sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree."

The Biden administration has argued that it has the authority under the Higher Education Act to make these changes, estimating that the plan would benefit millions of borrowers, with many having their monthly payments reduced to zero. As CBS News reported, critics complained that the actual cost of the program could be much higher than the $156 billion estimate, potentially reaching $475 billion over a decade.

"Because of the Eighth Circuit's orders... many borrowers are now experiencing intense confusion from being told that their payments must be recalculated and from being placed in forbearance -- which will delay any eventual loan forgiveness," wrote Justice Department Solicitor General Elizabeth Prelogar in a filing to the Supreme Court. "Borrowers would suffer additional harm if they are eventually sent higher bills and told that they can no longer count on the forgiveness that they were promised at the end of their repayment periods."