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News

Two Courts Temporarily Block Student Loan Forgiveness, Repayment Plan

By:
S.J. Steinhardt
Published Date:
Jun 26, 2024

Federal judges in Kansas and Missouri have issued preliminary injunctions to block further implementation of President Joe Biden’s Saving on a Valuable Education (SAVE) income-driven repayment plan, CNBC Make It and other publications reported.

The rulings prevent the Biden Administration from forgiving any more repayment under the SAVE plan, which the administration announced in August 2023. SAVE would forgive the debt of borrowers who make at least 20 or 25 years of qualifying payments based on their income, according to a fact sheet. The payments were scheduled to drop to 5 percent of discretionary income for borrowers with undergraduate debt currently on the SAVE Plan in July.

More than 8 million borrowers enrolled in the SAVE plan since it launched.

“Borrowers will be disappointed [and] angry that financial relief was yanked away from them at the last minute,” said higher education expert Mark Kantrowitz in an interview with CNBC Make It.

“Republican elected officials and special interests sued to block their own constituents from being able to benefit from this plan—even though the Department has relied on the authority under the Higher Education Act three times over the last 30 years to implement income-driven repayment plans,” U.S. Secretary of Education Miguel Cardona said in a statement. “The Department of Justice will continue to vigorously defend the SAVE Plan.”