A federal appeals court has allowed the U.S. Education Department to proceed with its plan to lower monthly payments for student loan borrowers. The ruling from the 10th U.S. Circuit Court of Appeals puts back on track President Joe Biden’s efforts to address student debt by reducing the amount some borrowers need to pay from 10% to 5% of their discretionary income. The reduced payment threshold was set to take effect on July 1 but was temporarily blocked by federal judges in Kansas and Missouri last week.
The ruling on Sunday allows the Education Department to move forward with the reduced payments while pursuing an appeal. However, the situation has left many borrowers uncertain about their financial obligations, according to Persis Yu, deputy executive director of the Student Borrower Protection Center. The Biden administration’s SAVE plan, introduced last year, aims to make college more affordable and forgive loan balances for eligible borrowers.
Education Secretary Miguel Cardona reaffirmed the administration’s commitment to fixing the student loan system despite the legal challenges. The appeals court ruling does not affect an injunction issued by a federal judge in Missouri that prevents the Education Department from forgiving loan balances going forward. The lawsuits filed by Republican-led states seek to invalidate the entire loan forgiveness program, which has already benefited at least 150,000 borrowers.
The Biden administration’s plan for student loan forgiveness has faced legal hurdles after the Supreme Court struck down the original plan. Despite the challenges, the administration remains focused on addressing the student debt crisis and making higher education more accessible to Americans.
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