WASHINGTON, D.C. — A pair of federal judges in Kansas and Missouri on Monday issued injunctions that temporarily halt portions of the Biden administration’s new student loan repayment plan, Saving on a Valuable Education (SAVE). These rulings will delay any plans from the administration to provide millions in student debt relief under the program and significantly reduce monthly payments for millions of borrowers, which was originally set to take effect July 1.
Nadine Chabrier, Senior Litigation and Policy Counsel at the Center for Responsible Lending (CRL) made the following statement:
The decision by the courts to temporarily block full implementation of the SAVE plan imperils the well-being of millions of struggling borrowers and hardworking families who depend on these lower payments to cover bills, save for a home, start a business or save for emergencies or retirement.
These lawsuits reinforce an oppressive student loan repayment system that favors the interests of big businesses at the expense of low-income borrowers and borrowers of color. By choosing to protect the profits of exploitative loan servicers over students seeking relief from excessive loan repayments that limit their financial options, courts have created further confusion in a system that already was failing to effectively administer loan repayments or provide accurate information to borrowers about the status of their loans.
We stand alongside the Biden administration in its mission to bring forth student loan relief and encourage them to continue their fight against the courts and all those who oppose this type of relief for millions of American families.
Additional Background
- The U.S. Department of Education had already identified about 414,000 borrowers eligible to have their debts cancelled under SAVE, totaling nearly $5.5 billion in debt relief, with more scheduled to have their loans forgiven.
- Payments under the SAVE plan are based on a borrower’s income and family size. Moreover, the amount of a borrower’s discretionary income that applies to repayment is cut in half, which lowers monthly payments. The plan also prevents unpaid interest from increasing a borrower’s loan balance, and ensures remaining balances are forgiven after a certain number of years.
- Unveiling the Potential of Saving on a Valuable Education (SAVE)
- Maximizing Impact: How a Simple Administrative Policy Shift Could Expand Access to Homeownership for Potential Buyers Repaying Student Loans Under the SAVE Program
- CRL Video Explains the Benefits of the New SAVE Income-Driven Repayment Plan for Student Debt
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Press Contact: Vincenza Previte vincenza.previte@responsiblelending.org