Appeals court blocks rest of Biden’s student loan forgiveness plan, creating uncertainty for borrowers
Daniel Steinle/Bloomberg via Getty Images
President Joe Biden Saving on a valuable education plan was temporarily blocked by a federal appeals court on Thursday, leaving millions of enrolled borrowers unsure how to pay off their student loans.
The ruling is the latest in a series of staggering rulings against the Biden administration’s latest attempt at mass student loan forgiveness. In June, two federal judges filed injunctions against key parts of the SAVE plan in response to Republican-led lawsuits in Kansas and Missouri. The rulings temporarily prevented the Department of Education from cutting payments for SAVE borrowers and blocked new attempts at forgiveness under the income-driven repayment program.
On June 30, the 10th U.S. Court of Appeals decided to allow the Department of Education to continue reducing borrowers’ payments to 5% of their discretionary income. However, the latest ruling by the 8th U.S. Court of Appeals temporarily halted all elements of the administration’s SAVE plan that had not already been blocked.
Payments for borrowers in the SAVE plan are currently on hold while the government works to recalculate monthly student loan payments. Following the latest ruling, it is uncertain what the next step is for borrowers enrolled in SAVE. It is possible that student loan payments will remain on hold – in a temporary forbearance – until the matter is resolved in court.
