U.S. President Joe Biden speaks as he announces a new federal student loan relief plan during a visit to the Madison Area Technical College Truax Campus in Madison, Wisconsin, U.S., April 8, 2024.
Kevin Lamarque | Reuters
Federal student loan payments for some 8 million borrowers it will be on hold for six months or more, a spokeswoman for the US Department of Education said.
Monday’s development comes as the administration is drawn into a series of legal battles over recent efforts by Republicans to ease student loans.
Loans exempt from monthly payments are those enrolled in the Biden administration’s new SAVE plan. The spokesperson of the Department of Education said that SAVE enrollees will be placed on a general exemption without interest.
A federal court issued an injunction earlier this year preventing the department from implementing parts of the Savings in Valuable Education plan. The agency billed SAVE as the cheapest payment plan in history, and many people were expected to cut their monthly bills in half.
The Republican attorneys general of Kansas and Missouri, who led the legal challenges against SAVE, say the Biden administration is essentially trying to find a roundabout way to forgive student debt. The Supreme Court blocked his sweeping debt cancellation plan in June 2023.
SAVE has two major litigation-driven provisions: it has lower monthly payments than any other federal student loan repayment plan and it leads to faster debt elimination for those with small balances.
Before the legal challenges, the Department of Education had already forgiven $5.5 billion in student debt to 414,000 borrowers through the SAVE Plan.
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