Biden administration freezes student loan repayments following court rulings – Washington Examiner
Federal judges in Kansas and Missouri have blocked portions of President Joe Biden’s student loan repayment program. Following this, the Department of Education announced a freeze on student loan payments and interest for 3 million borrowers. The program, known as SAVE, adjusts borrowers’ payments based on their earnings and family size. It was revealed that 4.5 million out of over 8 million participants qualify for zero monthly payments due to low income. Additionally, planned payment reductions set for July 1, which would have halved many borrowers’ payments, were halted by the block. Judge Daniel D. Crabtree emphasized that decisions on significant student debt forgiveness are matters for Congress to decide.
After federal judges in Kansas and Missouri sided in favor of Republican attorneys general by blocking parts of President Joe Biden’s student loan repayment program, the Department of Education announced it is freezing monthly student loan payments and interests of 3 million borrowers.
The Saving on a Valuable Education plan, better known as SAVE, determines a borrowers’ monthly payment based on their earnings and family size. There are more than 8 million people signed up for the plan and 4.5 million of them qualify for $0 monthly payments because of their low earnings.
On July 1, the Department of Education was going to implement payment reductions, with many borrowers seeing their payments being cut in half. That measure was blocked by Kansas U.S. District Judge Daniel D. Crabtree.
”As the court correctly held, whether to forgive billions of dollars of student debt is a major question that only Congress can answer,” he said in a statement. “Blue collar Kansas workers who didn’t go to college shouldn’t have to pay off the student loans of New Yorkers with gender studies degrees.”
Meanwhile, in Missouri, U.S. District Judge John A. Ross blocked the SAVE plan from granting additional student loan forgiveness. In some cases, borrowers’ loans are and have been forgiven after ten years as opposed to the typical 20 to 25 year plan.
However, a spokesman for the Department of Education told Politico that it will not give up on its promise “to fight for this long-overdue relief” for borrowers.
It is not clear by what legal authority the Biden administration possesses the right to postpone student loan payments.
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The SAVE program application was taken down from the Education Department’s website while the department works to make updates to it in order to comply with the court orders. However, borrowers who’d like to still enroll in the plan can submit a paper application in the meantime. Once enrolled, borrowers will have their monthly payments and interest suspended.
“We are pleased to see the Department of Education take quick and decisive action,” Natalia Abrams, executive director of the nonprofit advocacy group Student Debt Crisis Center, told the Washington Post. “Given the lack of clarity, swirling questions, and legal uncertainty of the Save plan, [we’re] calling for a widespread payment pause on all federal student loans.”
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