Appeals court lifts ban on Biden’s student loan repayment plan

President Biden can move forward with implementing a key part of his new student loan repayment plan after a federal appeals court lifted aimposed to block Biden from launching the final component of the Saving on a Valuable Education program, commonly known as Save. The injunction, handed down last week by U.S. District Judge Daniel D. Crabtree of Kansas,the Education Department from cutting most enrollees’ monthly payments in half starting in July.

“The Tenth Circuit sided with student loan borrowers,” Education Secretary Miguel Cardona said in a statement Monday. “President Biden, Vice President Harris and I remain committed to our work to fix a broken student loan system and make college more affordable for more Americans.

to 5 percent of income above 225 percent of the federal poverty line. Borrowers who also have graduate loans will have their payments lowered by the weighted average between 5 percent and 10 percent.payments and interest charges for 3 million people enrolled in Save in response to the injunction. Those borrowers will remain in forbearance this month and will be expected to pay their first lowered payment in August, according to the Education Department.

Despite the weekend win with the appeals court, the Biden administration is still contending with another injunction in Missouri that has stopped the department from forgiving any loans under the Save plan. The agency has already approved $5.5 billion in loan cancellation for 414,000 enrollees who met the plan criteria by originally borrowing less than $12,000 and paying down their debt for at least 10 years.

In that case, U.S. District Judge John A. Ross agreed with Missouri Attorney General Andrew Bailey and five other Republican-led states that Biden probably lacks the authority to erase debts through the Save plan. He also agreed that the loan-forgiveness component would harm the Missouri Higher Education Loan Authority, a quasi-state agency that services federal student loans and funds state scholarships.

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