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Federal Judges Block Biden’s SAVE Student Loan Program in Kansas and Missouri – What to Know!

(photo: The New York Times)

Federal judges in Kansas and Missouri have temporarily blocked President Biden’s SAVE student loan repayment program.

Federal Judges Halt Biden’s SAVE Student Loan Repayment Program in Kansas and Missouri

Federal judges in Kansas and Missouri halted key aspects of President Joe Biden’s student loan repayment program on Monday night. The SAVE plan, which adjusts monthly payments based on income and has been in effect for nearly a year was targeted. While the rulings prevent further implementation of the program and its planned expansion, current enrollees can continue using SAVE as is until the legal cases conclude. This includes pausing phase two of SAVE which aimed to reduce monthly payments and halting additional debt cancellations for long-term borrowers with smaller initial loans.

SAVE, akin to other income-driven repayment plans but more generous has been pivotal in Biden’s efforts to reform student debt repayment. It allows lower payments potentially even $0 for minimum wage earners, and promises quicker debt relief. Biden’s administration has already forgiven $5.5 billion in debt for over 414,000 borrowers through SAVE. Legal challenges from Republican-led states argue that Biden lacks congressional authority for such sweeping changes to student loan repayment mirroring previous disputes over debt relief initiatives, according to the report of ABC News.

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(photo: MarketWatch)

Education Department and White House to Challenge Court Rulings on SAVE Student Loan Program

The Department of Education and the White House plan to vigorously challenge the court rulings. Education Secretary Miguel Cardona criticized the impact on borrowers’ ability to manage debt responsibly, while White House Press Secretary Karine Jean-Pierre blamed Republican opposition for hindering efforts to provide reduced loan payments and faster debt forgiveness. The rulings create uncertainty about the future of the SAVE plan and its promise to alleviate student loan burdens, pending further legal proceedings and potential appeals.

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