Biden student loan repayment plan to resume amid legal challenges, federal appeals court rules
As the legal challenges to President Joe Biden’s plan for student loan relief unfold, a federal appeals court has allowed a key component of it to be resumed.
The 10th Circuit U.S. Court of Appeals, in a ruling issued on Sunday, granted the Biden Administration’s request for a stay of an order that was made last week and temporarily blocked a SAVE plan provision.
Experts say that Biden’s decision was a big win. His biggest achievement to date was the SAVE plan, which provided relief to student loans borrowers. According to the White House, so far, 8 million borrowers are signed up for this new income-driven plan.
A federal judge in Kansas blocked the Biden administration from lowering monthly payments for borrowers under the SAVE program last week.
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The Department of Justice appealed quickly.
The ruling of the appeals court will allow Biden’s administration to proceed with the lowering of monthly payments for borrowers.
In SAVE, many borrowers only pay 5% of their monthly discretionary income to their debt. Anyone making less than $32,800 has no monthly payment. In the other income-driven plans, borrowers are required to pay at least 10% of their discretionary earnings.
The SAVE Student Loan Forgiveness is still on Hold
The second injunction, issued by a federal Missouri judge last week, against the SAVE program remains in place. The Biden administration is unable to forgive student debts under the SAVE plan.
It is also expected that the Justice Department will appeal Missouri’s ruling.
Kansas and Missouri’s preliminary injunctions were the result of lawsuits that were filed by Republican-led state earlier this year. The states claimed that the Biden Administration was abusing its authority by implementing the SAVE plan and was trying to find an indirect way to forgive student loans after the Supreme Court ruled against its sweeping plan in 2017.
The Education Department reported that by mid-April, SAVE had provided debt relief to 360,000 borrowers worth $4.8 billion.
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