The ruling poses a setback for the administration's efforts to provide financial relief to millions of borrowers struggling with student loans.

In response to the ruling, White House spokesman Angelo Fernández Hernández criticized Republican efforts to increase costs for borrowers and pledged to continue advocating for the plan.

The U.S. Supreme Court has blocked a significant portion of President Biden's student debt relief initiative, particularly the SAVE plan.

This decision follows an injunction from the 8th Circuit Court, which has overshadowed other legal challenges and led the Supreme Court to dismiss additional lawsuits against the plan.

Before the court's decision, the SAVE plan was the primary avenue for borrowers seeking loan forgiveness, with around 8 million individuals enrolled.

Solicitor General Elizabeth Prelogar argued that the Education Department has the authority to modify repayment terms under a federal law from 1993.

The SAVE plan, touted by Biden as the most affordable repayment option ever, has already allowed approximately 400,000 borrowers to receive some form of debt cancellation.

U.S. Secretary of Education Miguel Cardona expressed concern that the 8th Circuit's decision would lead to increased monthly payments for millions of borrowers.

Cost estimates for the SAVE plan vary widely; while the Biden administration estimates it will cost taxpayers about $156 billion over ten years, Republican states claim it could reach $475 billion.

The ongoing legal challenges have created confusion for borrowers, complicating their financial planning amid rising living costs.

To mitigate the impact of the legal issues, the Department of Education has placed borrowers in an interest-free forbearance, pausing their monthly payments.

The SAVE plan remains on hold as the 8th Circuit Court of Appeals deliberates on the legal challenges, a process that could take several weeks.