The U.S. Department of Education in Washington, D.C.
Caroline Brehman | CQ-Roll Call, Inc. | Getty Images
Two federal judges in Kansas and Missouri have temporarily suspended a significant portion of President Joe Biden’s new student loan repayment plan, putting debt relief for millions of Americans at risk.
Monday night’s decisions prevent the U.S. Department of Education from implementing major provisions of the Saving on a Valuable Education, or SAVE, plan. Until the cases are decided, the Biden administration is unable to cancel more debt under the new income-driven repayment plan and further reduce borrowers’ payments in July, as she had planned it.
More than 8 million borrowers have signed up for the SAVE plan since its launch in August. Those enrolled were less than a week away from seeing their monthly bills cut in half or more.
“Borrowers will be disappointed (and) angry that financial aid was taken away at the last minute,” said higher education expert Mark Kantrowitz.
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The preliminary injunctions are the result of lawsuits filed earlier this year by Republican-led states, which hoped to overturn the Biden administration’s creation of what it called the most affordable student loan repayment plan in the country. ‘history. Under the plan, many borrowers put only 5% of their discretionary income towards their debt each month, and anyone making $32,800 or less receives no monthly payment.
The states argued that the Biden administration was overstepping its authority and trying to find a backdoor way to cancel student debt after the Supreme Court blocked its sweeping plan last year.
U.S. Education Secretary Miguel Cardona has vowed to fight for the aid.
“Republican officials and special interests have been sued to prevent their own constituents from benefiting from this plan – even though the department has relied on the authority of the Higher Education Act three times over the past few years. last 30 years to implement income-driven repayment plans,” Cardona said in a statement Monday.
“The Department of Justice will continue to vigorously defend the SAVE plan,” he added.
The decisions do not impact the Biden administration’s second attempt to provide broad student loan forgiveness, after its first aid program was ruled unconstitutional by the Supreme Court. This redesign effort is still ongoing.
This is breaking news. Please check again for updates.
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