Federal Judges Put Biden’s New Loan Repayment Plan on Hold
Katherine Knott
June 24, 2024
Two federal judges on Monday dealt different blows to the administration’s generous income-driven loan repayment plan. What does that mean for borrowers awaiting relief?
After forgiving $5.5 billion in student loans for 414,000 borrowers, the Biden administration won’t be able to wipe out the balances for any additional borrowers under its new income-driven repayment plan.
More than eight million borrowers are enrolled in the plan known as a Saving on a Valuable Education, or SAVE, which is designed to make payments more affordable and offer a quicker pathway to forgiveness for borrowers, depending how much they initially took out in loans to pay for their education.
Federal judges in Missouri and Kansas handed down orders Monday evening dealing dual setbacks to SAVE, which has become a centerpiece of the president’s efforts to overhaul the student loan system. The Missouri judge blocked the administration from doling out any additional debt relief under SAVE, while the Kansas judge’s order prevents the department from implementing the other parts of the program set to take effect July 1.
