The implementation of President Joe Biden’s new student loan repayment plan, known as Saving on a Valuable Education (SAVE), has been temporarily suspended by federal judges in Kansas and Missouri. These rulings have put debt relief for millions of Americans at risk.
The injunctions prevent the U.S. Department of Education from enacting significant provisions of the SAVE plan. As a result, the Biden administration is currently unable to forgive additional debt under the new income-driven repayment plan or reduce borrowers’ payments as expected in July.
Since its launch in August, more than 8 million borrowers have enrolled in the SAVE plan. They were days away from seeing a substantial reduction in their monthly bills.
Higher education expert Mark Kantrowitz expressed his disappointment on behalf of the applicants, saying they would be disappointed that financial support was withdrawn at the last minute.
The preliminary injunctions stem from lawsuits filed earlier this year by Republican-led states seeking to overturn the Biden administration’s creation of what it claimed was the cheapest student loan repayment plan in state history United. Under the plan, many borrowers would have to pay just 5% of their discretionary income to cover their debt each month, and those earning $32,800 or less would have a $0 monthly payment.
The states argued that the Biden administration was exceeding its authority and trying to find a roundabout way to forgive student debt after its broader plan was blocked by the Supreme Court last year.
U.S. Education Secretary Miguel Cardona vowed to continue fighting for the aid, noting that Republican elected officials and special interests have sued to block their constituents from benefiting from the plan. He noted that the Education Department has repeatedly relied on its authority under the Higher Education Act to implement income-based reimbursement plans over the past three decades.
It is important to note that these rulings do not impact the Biden administration’s second attempt at broad student loan forgiveness, which is still ongoing. The previous relief package was found unconstitutional by the Supreme Court, prompting a revamp effort.