Biden’s New Repayment Plan Blocked: 8 Million Student-Loan Borrowers Spared from Making Payments

Legal Hurdles for Student-Loan Borrowers

The 8th Circuit Court of Appeals has halted the SAVE student-loan repayment plan entirely, impacting millions of borrowers who were expecting relief. This includes lower monthly payments and a quicker route to debt cancellation that are now on hold.

Legal Battles Unfold

Earlier this year, GOP state attorneys general filed lawsuits to block the SAVE plan, leading to a series of legal challenges. While the 10th Circuit allowed some provisions of the plan to proceed, the recent ruling by the 8th Circuit has put a stop to the program in its entirety.

Education Department's Response

Education Secretary Miguel Cardona assured borrowers that those enrolled in SAVE will be placed in interest-free forbearance during the ongoing legal battle. The department will be keeping borrowers updated as the situation unfolds.

Implications for Borrowers

The SAVE plan's suspension has left 8 million borrowers in limbo, with 4.5 million eligible for zero-dollar monthly payments. If the court's final ruling prohibits the implementation of SAVE, borrowers may need to adjust their budgets once again.

Political Reactions

While some Republican lawmakers have praised the court's decision, Biden's administration remains committed to providing relief to borrowers. Plans for a broader student-loan forgiveness program in October aim to benefit over 30 million borrowers.

Despite the setback, Secretary Cardona criticized the ruling, emphasizing the potential harm to millions of borrowers. He condemned politically motivated lawsuits hindering efforts to lower payments for struggling borrowers.

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By: asheffey@businessinsider.com (Ayelet Sheffey)
Title: Biden’s New Repayment Plan Blocked: 8 Million Student-Loan Borrowers Spared from Making Payments
Sourced From: www.businessinsider.com/save-plan-blocked-student-loan-payments-paused-no-debt-cancellation-2024-7
Published Date: Fri, 19 Jul 2024 13:38:54 +0000