Court rulings keep student loan borrowers waiting for Biden relief


The White House on Tuesday vowed to appeal two court rulings that have suspended parts of a major repayment plan affecting the monthly bills of millions of borrowers.

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This week isn’t the first time — and probably won’t be the last — that legal hurdles have stymied President Joe Biden’s signature student loan forgiveness policies.

In separate rulings on Monday, federal judges in Missouri and Kansas blocked parts of the president’s income-based reimbursement program, known as Value Education Savings, or SAVE. That plan, which the Biden administration tried to quickly implement, has reduced monthly payments to $0 for millions of borrowers. The Education Secretary often refers to it as “Cheapest repayment plan in history.”

While the federal Education Department says more than 400,000 borrowers have already been served through SAVE, the rulings prevent the agency from fully implementing the program, although the decision will not reverse nearly $5.5 billion in student loan cancellations. Scheduled for next week.

That means parts of the plan remain on legal limbo for the foreseeable future, including reducing monthly payments for some borrowers who took out undergraduate loans and wiping out balances owed by borrowers who have been repaying for a decade.

More Legal Issues: The latest GOP lawsuit takes aim at the SAVE program

A Report On Tuesday, White House press secretary Karine Jean-Pierre said the administration would appeal the rulings. Meanwhile, affected borrowers may have to wait indefinitely for reliable news about their loan forgiveness.

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“We will never stop fighting to lower monthly payments and help borrowers out of the burden of student debt — no matter how many times Republican elected officials try to stop us,” Jean-Pierre said.

Louisiana Sen. Bill Cassidy, the ranking Republican on the Senate Education Committee and a frequent critic of Biden’s student loan agenda, blasted the president’s income-based repayment plan and praised the bans.

“These illogical, irresponsible policies by President Biden are nothing more than a cynical attempt to buy votes before the next election,” Cassidy said in a statement.

Who will be affected by recent court rulings related to student loans?

As the dust settled on Tuesday, it was Still not entirely clear How these restrictions could immediately affect the more than eight million borrowers registered with SAVE. But based on the judges’ reasoning and the education sector’s initial reactions to the decision, borrowers can be sure of a few things.

First, anyone who has already canceled their loan need not worry about getting it repossessed. Designed by Daniel Crabtree, a federal judge in Kansas His judgment For parts of SAVE effective July 1.

In Missouri, U.S. District Judge John Ross took a different line. He determined that only the debt cancellation portions of Biden’s plan were illegal. Part of the plan “still offers most borrowers a plan to lower their payments and limit interest accruals,” he wrote in his decision.

Borrowers who enroll in SAVE can have their debt wiped out if they originally took out $12,000 or less in student loans and paid back at least 10 years, the Department of Education said.

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Jean-Pierre said the Department of Education will continue to sign up more borrowers who can be helped by SAVE. Those benefits include lower monthly payments, reducing bills to $0 for anyone making $16 an hour or less, and protection against ballooning interest, he said.

Will the rulings affect other student loan relief?

Although the Biden administration has canceled billions of dollars in student loans, the threat of court challenges continues to hang over those efforts.

Since the U.S. Supreme Court struck down his initial large-scale plan last summer, the president has been working on several alternatives to provide relief to borrowers. One of those strategies is save. The other is more far-reaching and is currently working its way through the regulatory process.

Monday’s decisions put another dent in broad hopes that Biden would succeed in issuing more pardons in the future.

What now for student loan borrowers?

The legal battle between the Biden administration and Republican state attorneys general to try to dismantle the program is not expected to end anytime soon. Procedural dynamics in different courtrooms can affect timelines in unexpected ways.

Biden’s other student loan relief plan, meanwhile, won’t go into effect until July of next year at the earliest — and that deadline doesn’t take into account other legal hurdles that could further delay borrowers getting help.

Zachary Schermele covers education and breaking news America Today. You can reach him by email at [email protected]. Follow him on X at @ZachSchermele.

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