Supreme Court blocks Biden-Harris administration's new student debt forgiveness plan

The Supreme Court rejected the Biden-Harris administration's latest plan to reduce debt for millions of student loan recipients. The initiative was a priority for the Biden administration since the start of his term.

"The application to vacate injunction presented to Justice Kavanaugh and by him referred to the Court is denied. The Court expects that the Court of Appeals will render its decision with appropriate dispatch," the Supreme Court wrote in a statement released Wednesday.

The Biden-Harris administration's new plan, announced in April, promised to forgive up to $20,000 for each borrower enrolled in the Saving on a Valuable Education (SAVE) program.

Biden's goal before the end of his term is to provide debt forgiveness to millions of students enrolled in the SAVE plan. The latest batch of beneficiaries was in July, when 35,000 borrowers were forgiven.

What is the SAVE plan?

President Biden's new initiative consists of two phases. The first took place in the fall, "increasing income protected from payments from 150 percent above the federal poverty guidelines to 225 percent and eliminating unpaid interest accrued outside of calculated payments."

The second was scheduled for July, when payments would be reduced from 10% of discretionary income to 5%.