The Saving on a Valuable Education (SAVE) plan suggested limiting the amount people have to repay for undergraduate loans to 5% of their incomes, down from the previous 10%.

It also included provisions to limit accrued interest and shorten the payment period for certain small loans, allowing them to be forgiven.

Multiple conservative-leaning states, led by Missouri, challenged the new plan, arguing that it would require spending up to $475 billion, which Congress did not authorize. They contended that the administration did not have the authority to implement such a sweeping policy without approval from Congress.

In response to the Supreme Court’s decision, an Education Department spokesperson expressed disappointment, stating that lifting the injunction would have allowed for lower payments and other benefits for borrowers nationwide.

The department will continue to advocate for lower repayment options for borrowers while working to minimize further harm and disruption to borrowers.

The Supreme Court’s rejection of the administration’s request to lift the injunction means that the SAVE plan and previous changes to repayment terms dating back to 1994 remain on hold. This decision affects around 8 million people already enrolled in the SAVE plan.

Overall, the Supreme Court’s decision represents a significant setback for the Biden administration’s efforts to address federal student loan debt through the SAVE plan.