Department of Education Shuts Down Student Loan Forgiveness Applications After Court Ruling

Feb 24

The U.S. Department of Education has removed online applications for student loan forgiveness and repayment programs following a ruling from the 8th U.S. Circuit Court of Appeals that blocked President Joe Biden’s Saving on a Valuable Education (SAVE) plan. This decision leaves millions of borrowers without access to anticipated debt relief, marking another major shift in the ongoing legal battles over federal student debt.

The court determined that the SAVE plan exceeded executive authority, arguing that any widespread debt cancellation must be approved by Congress. In response, the Federal Student Aid office removed key application portals for income-driven repayment (IDR) plans and loan consolidation—two pathways that had helped borrowers lower payments or work toward loan forgiveness.

The policy reversal is a major setback for federal student loan borrowers, particularly those who had anticipated reduced monthly payments or full debt cancellation under the now-frozen SAVE plan. The plan was designed to offer more affordable income-based payments, capping them at 5% of discretionary income and accelerating loan forgiveness for low-income borrowers.

With these options no longer available, borrowers must navigate alternative repayment plans, including Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE), which do not offer the same benefits as the blocked SAVE program. The Department of Education has announced that these plans will reopen for applications later this year, though no specific date has been provided.

The fight over student loan relief has been highly politicized, with Republican-led states challenging the Biden administration’s authority to cancel debt through executive action. The Supreme Court previously struck down a $400 billion forgiveness plan in 2023, and this latest ruling continues that pattern of judicial pushback.

The White House has signaled that it will explore alternative paths to loan relief, potentially involving legislation from Congress. However, with a divided political climate, any large-scale debt cancellation proposal is expected to face significant resistance.

The future of student loan forgiveness remains uncertain as legal challenges continue to reshape federal policy. With the Biden administration exploring alternative solutions and the Department of Education adjusting its approach, borrowers are left waiting for clarity. As this situation develops, we will continue to provide updates on new rulings, policy changes, and what they mean for those affected. Stay tuned for the latest information as it becomes available.