Federal judges in Kansas and Missouri have ruled against parts of the student loan repayment plan, known as the SAVE Plan, promoted by the Biden-Harris administration.
Dr. Miguel Cardona
The U.S. Department of Education relied on its authority under the Higher Education Act to implement income-driven repayment plans that the two lawsuits sought to invalidate entirely.
U.S. District Judge Daniel Crabtree ruled in a lawsuit filed in Kansas that the U.S. Department of Education would not be allowed to implement parts of the program meant to help students who had larger than $12,000 in loans and, thus, would have their monthly payments lowered and their required payment period reduced from 25 years to 20 years. The lawsuit was filed by state's attorney general, Kris Kobach, on behalf of the state and 10 others.
In the lawsuit filed by Missouri Attorney General Andrew Bailey on behalf of the state and six others, U.S. District Judge John Ross' order stated that the department cannot forgive loan balances going forward but that the department still could lower monthly payments.
Although the decisions do not cancel assistance already provided to borrowers, the rulings do prevent the department from helping to ease loan repayment burdens going forward under a rule set to go into effect July 1.
Cardona said the U.S. Department of Justice will continue to defend the SAVE Plan.
“We designed SAVE to cut undergraduate loan payments in half, avoid interest growth for borrowers making zero-dollar or low payments, and allow at-risk borrowers to reach forgiveness faster,” said Cardona. “Under SAVE, nearly 8 million Americans — one out of five borrowers — have breathing room from bills that, too often, compete with basic needs.”
